1. Why should WhitePearl Berhad focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project?
2. What are the incremental cash flows for the project in Year 1 through 5, and how do these cash flows differ from the accounting profits or earnings?
3. What is the project's initial outlay?
4. Calculate the project's net present value?
5. Should the project be accepted? Why or why not
6. The company realizes that some of these estimates are subjected to economic conditions. If estimated sales drop by 25%, should WhitePearl Berhad proceed with the project? Why or why not.