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Task 3 (52 marks) Bio Excel Corporation is a producer of biodegradable products located in Shah Alam, Selangor. You are working with the company as

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Task 3 (52 marks) Bio Excel Corporation is a producer of biodegradable products located in Shah Alam, Selangor. You are working with the company as Junior Executive. Due to high demand of biodegradable products, your company is planning to expand its business next year. Your manager had projected the following cash flows and discount rates. Your company standard payback period is 4 years. There is no limitation or restriction on the business expansion. You are required to provide analysis in regards with these investments. Based on the above information, show your workings using Excel spreadsheet. In your analysis, including the following: a) If the company apply the payback period, which investment should the company choose? Why? [12 marks] b) If the company apply the Net Present Value, which investment should the company choose? Why? [12 marks] c) If the company apply the Internal Rate of Return, which investment should the company choose? Why? [6 marks] d) If the company apply the Profitability Index, which investment should the company choose? Why? [8 marks] e) If the company budgeted RM15 million for this expansion, advise your manager, which investment(s) should the company proceed and reject? Why? How much is the total initial cost of the chosen project(s)? [5 marks] f) From the previous question f), how would your decision change, if there's no capital limitation? State your decisions for each investment and reasons. Rank your preferred investment(s). [5 marks] g) Assume this is mutually exclusive investment, state your decisions for each investment and reasons. [4 marks] Task 3 (52 marks) Bio Excel Corporation is a producer of biodegradable products located in Shah Alam, Selangor. You are working with the company as Junior Executive. Due to high demand of biodegradable products, your company is planning to expand its business next year. Your manager had projected the following cash flows and discount rates. Your company standard payback period is 4 years. There is no limitation or restriction on the business expansion. You are required to provide analysis in regards with these investments. Based on the above information, show your workings using Excel spreadsheet. In your analysis, including the following: a) If the company apply the payback period, which investment should the company choose? Why? [12 marks] b) If the company apply the Net Present Value, which investment should the company choose? Why? [12 marks] c) If the company apply the Internal Rate of Return, which investment should the company choose? Why? [6 marks] d) If the company apply the Profitability Index, which investment should the company choose? Why? [8 marks] e) If the company budgeted RM15 million for this expansion, advise your manager, which investment(s) should the company proceed and reject? Why? How much is the total initial cost of the chosen project(s)? [5 marks] f) From the previous question f), how would your decision change, if there's no capital limitation? State your decisions for each investment and reasons. Rank your preferred investment(s). [5 marks] g) Assume this is mutually exclusive investment, state your decisions for each investment and reasons. [4 marks]

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