Why is the capital budgeting decision crucial and important for a firm? State why the capital budgeting
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Question:
- Why is the capital budgeting decision crucial and important for a firm? State why the capital budgeting errors are so costly?(6 marks)
- The JLK Corporation is considering an investment that will cost RM80,000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are RM25,000 per year and for the last two years they are RM20,000 per year. Calculate the payback period for this investment. (7 marks)
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