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Use the information to answer the following Questions 1-7 Cementis Company (U.s.) is considering investing RM20, 000,000 to construct a cement manufacturing facility in Malaysia.

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Use the information to answer the following Questions 1-7 Cementis Company (U.s.) is considering investing RM20, 000,000 to construct a cement manufacturing facility in Malaysia. After five years the subsidiary will be sold to Malaysian investors for RM80,000,000. The new plant is expected to increase sales revenues by RM20,000,000 per year over current levels for the next 5 years however; operating expenses will also Increase by RM10,000,000 per year. Depreciation expenses will be RM1,000,000 pe year. The initial investment will be made on December 31, 2021, and cash flows will occur on December 31st of each succeedin year. Annual cash dividends to Cementis Company from Malaysia will equal 75% of accounting income. The U.S. corporate tax rate is 40% and the Malaysian corporate tax rate is 24%. Annual dividends paid to Cementis Company will not be subject to additional taxes in the United States. There are no capital gains taxes on the final sale. Cementis Company uses a weighted average cost of capital (WACC) of 14% on domestic investments, but will add 6% for the Malaysian investment because of perceived greater risk.Cementis Company forecasts the ringgit/dollar exchange rate for December 31st on the next six years are listed below. Expected exchange rate (RM/S) in 2021-4.40; Expected exchange rate (RM/S) in 2022 = 4.80; Expected exchange rate(RM/S) in 2023 = 5.00; Expected exchange rate (RM/S) in 2024 = 5.20 Expected exchange rate (RM/S) in 2025 =5.40 Expected exchange rate (RM/$) in 2026 +5.50. 1.What is the initial investment for Cementis Company from the project viewpoint? A) RM20,000,000 B)RM80,000,000 C) US$20,000,000 D) US$80,000,000 2. What are the annual net incomes for Cementis Company from the project viewpoint? A) RM5,840,000 B) RM6,840,000 C) RM7,840,000 D) RM8,840,000 3.What is the terminal cash flow for Cementis Company in year five from the project viewpoint? A) US$87,840,000 B) RM87,840,000 C)US$86,840,000 D) RM86,840,000 4. What is the net present value (NPV)on this Investment from the project viewpoint? A) RM35,596,605 B)RM45,596,605 C)- RM35,596,605 D) -RM45,596,605 5.What is the internal rate of return(IRR)on this investment from the project viewpoint? A) -58.64% 8)-68.64% C)58.64% D)68,64% 6.What is the net present value (NPV)on this investment from the parent company's viewpoint? A)-US$1,520,000 B) - US$1,684,210 C) US$3,007,000 D) US$4,307,058 7. What is the internal rate of return(IRR)on the Investment from the parent company's viewpoint? AYA. BUA1 R 1200 mg

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