Shahed corp is proposing a 5-year project to produce a new engine model. The initial cash outlay for fixed assets is RM115,000,000.00 and initial investment in net working capital of RM20,000,000.00. The net working capital will be recovered 50 percent in year 3, and the balance at the end of the project's life. The fixed assets will be depreciated using straight-line depreciation over the life of the project. The company expects to sell 500 units per year for the 5-year period at RM105,000.00 per unit for the first 3 years. Thereafter, the price expects will drop to RM90,000.00 per unit due to competition from other makers. Fixed costs are expected to be RM4,000,000.00 per year while variable costs are expected at RM11,000.00 per unit in the first year, and shall increase by RM5,000.00 every year for the next 4 years due to the increase in the price of raw material.

The current corporate tax rate is 24 percent with required rate of returns of 10 percent.

Calculate the relevant cash flows:

i. Net initial outlay

ii. Projected income statements for year 1 to year 5

iii. Projected total cash flows

iv. Based on net present value (NPV) method, should the company produce the new engine model? Justify your answer.