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Starlight Corporation is in the planning stages for the construction of a new manufacturingplant, equipped with 60 production lines desianed for continuous operation. The anticipatedutilization

Starlight Corporation is in the planning stages for the construction of a new manufacturingplant, equipped with 60 production lines desianed for continuous operation. The anticipatedutilization of these production lines is projected to be 92% throughout the entire year. Theinitial investment cost for all the production lines is estimated at RM950,000. The expectedannual revenue generated per line is RM8.200 in the first year, with a 10% incrementaincrease projected for each subsequent vear from vear 2 to year 6. The operating cost peline is RM1,200, with an anticipated 10% annual increase from year 2 to year 6. The projectcontemplates ceasing operaions at the end of vear 6, with the entire business expected to besold for RM420,000. The cost of capital for the project is estimated at 12%. Provide advice onthe project's acceptability or rejection using the methods outlined below.

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Starlight Corporation is in the planning stages for the construction of a new manufacturingplant, equipped with 60 production lines desianed for continuous operation. The anticipatedutilization of these production lines is projected to be 92% throughout the entire year. Theinitial investment cost for all the production lines is estimated at RM950,000. The expectedannual revenue generated per line is RM8.200 in the first year, with a 10% incrementaincrease projected for each subsequent vear from vear 2 to year 6. The operating cost peline is RM1,200, with an anticipated 10% annual increase from year 2 to year 6. The projectcontemplates ceasing operaions at the end of vear 6, with the entire business expected to besold for RM420,000. The cost of capital for the project is estimated at 12%. Provide advice onthe project's acceptability or rejection using the methods outlined below.

Required: (a) Accounting Rate of Return (AROR) (b) Payback Period Technique (PBP) (c) Discounted Payback Period (DPP) (d) Net Present Value Technique (NPV) (e) Profitability Index (PI) f) What is the importance of the Technique used for analysis on Capital budgeting cost for aproject?

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