Sydney Harbor Inc.

Sydney Harbor Inc. is evaluating the following project's proposal:

The project cost is RM3.5 M, with additional fixed asset purchase of RM0.5M.

The operating cash flows of the project are as follows:

Year
1	RM 1,750,000.00
2	RM 1,800,000.00
3	RM 2,500,000.00
4	RM 1,500,000.00
5	20% of the project cost

At the termination of the project, 40% of the fixed asset cost is to be recovered . The company's cost of capital is 5.14% p.a.

Based on Capital Budgeting Techniques, answer all the questions.