The financial manager of Yellow Berhad, Puan Julie, is considering a project which requires

an investment of RM$53,000$ in a machine. This machine in which will improve the performance

and production quantities of the company's range of biscuits. At the end of the five$-$year period,

this machine will be scrapped.

Puan Julie expects that this project will lead to increased sales for the next five years as follows:

The selling price per unit is RM$20.$ Labor and utilities costs are estimated to be RM$8$ and RM$4$ per

unit respectively. The project requires an increase in net working capital of RM$10,000$ in the initial

year and will be fully recovered at the end of the project. The company's required return on

investment of $15\%.$

Puan Julie thinks that the unit sales, selling price, labor, and utilities cost projections are

accurate to within $15\%.$

Note: The calculation on depreciation, fixed cost and the effect on tax is ignored for this question.

From the given information, you are required to answer the following questions.

a$.$ Determine the upper and lower bounds on unit sales, selling price, labor, and utilities cost for

this projection.

b$.$ Based on your answer in part $($a$),$ prepare the Cash Flows Analysis clearly showing the Net

Present Value $($NPV$)$ for the best and worst$-$case scenario.

c$.$ Based on the NPV in part $($b$),$ explain your findings to Puan Julie.