subjective questions are specifically designed to meet the followin Analyse financial statement and accounting reports ,Adopt strategic perspectives in analysing management accounting issues. Apply the essential concepts and principles of financial management in terms of risk and return. Apply financial management techniques for valuation purposes

provide the answers below base on top topics.

CDE is evaluating the financing of a new project. The amount of investment capital required is RM15,000,000.00. The expected Earnings before interest and Tax (EBIT) is RM4,900,000.00

CDE has an unleveraged beta of 1.2

The corporate tax rate is 30%

Stock market Analyst have forecasted a 20% return from the Stock Market

Risk-free Rate stands at 3%

The following table shows the cost of debt available for each level amount of debt that CDE can obtain from the financial market.

Debt Amount (RM) Cost of Debt (Rd)

0.00 8.00%

1,500,000.00 8.00%

3,000,000.00 9.00%

4,500,000.00 10.00%

6,000,000.00 12.00%

7,500,000.00 13.00%

Determine whether CDE should accept the project. Acceptance of the project should be based on the lowest Weighted Average Cost of Capital and maximum Economic Value added from the project.

In the light of the answers in part a), the company is seeking to improve the situation by considering both plans using the break even analysis. Give hour suggestions and recommendations on which plan the company should take.