Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

urgent please help. financial management Shubaru Corparation is a well establish firm that manufacture automotive cars in Malaysia with the brand of Shubaru. The firm

urgent please help.
financial management

image text in transcribed
Shubaru Corparation is a well establish firm that manufacture automotive cars in Malaysia with the brand of Shubaru. The firm has few divisions according to the tasks of the work in process of its products. Currently about 50% of its raw materials are imported from Japan and Korea. The firm rely much 60% on the human and the remainder on the machine, If the firm able to purchase high-technology machineries, it's can reduce the number of labour from 60% to 40%. Currently the firm is surveying few machineries from Japan and Germany As a Finance Executive in the department, you have to make a capital budgeting for the firm to decide either to buy the machine form Japan or Germany. This project is a mutually exclusive project and the cost of capital is 10%. The cost machines from Japan is RM1.2 million while the cost machines from Germany is RMI.5 million. You are projected the cash flow for machine purchase from Japan as follows: 1" year: RM500,000 2nd year: RM700,000 3 year: RM800,000 4 year: RM900,000 While cash flow from machine buy from Germany as follows: 1" year & 2 year: RM600,000 for each year 3rd year. Increase RM200,000 from the previous year cash flow 4th year: Increase by 15% from year 3 cash flow Required: a) Calculate each machine based on payback period. If the firm requires 3 years to cover the initial outlay, which machine to choose? (4 marks) (CLO2:PL06:C4) b) Calculate each project based on the net present value (NPV). (6 marks) (CLO2:PLO6:C4) Calculate each project based on IRR

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Institutions And Markets

Authors: Jeff Madura

10th International Edition

0538482176, 9780538482172

More Books

Students also viewed these Finance questions

Question

Solve for x: 2(3x 1)2(x + 5) = 12

Answered: 1 week ago