Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

show all workings very urgent please QUESTION 4 Ribu Riban Company is attempting to evaluate the feasibility on investing RM95,000 in a piece of equipment

image text in transcribed

show all workings very urgent please

QUESTION 4 Ribu Riban Company is attempting to evaluate the feasibility on investing RM95,000 in a piece of equipment that has a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown in the following table. The firm has a 12% cost of capital. Year (0) 1 2 3 4 5 Cash inflows(CFt) - RM 20,000 25,000 30,000 35.000 40,000 a. Calculate the net present value (NPV) for the proposed investment. b. Calculate the internal rate of return (IRR) for the proposed investment. C. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? Why? d. What if NPV and IRR result contradicts one another. Theoretically which result should you choose? How about practically? Is there any difference? Discuss. (Total: 20 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions