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Year Forecasted Project Cash Flow (RM million) Project AXA Project BYB 0 1 2 3 4 (3.40) 0.80 1.20 1.30 0.60 (3.50) 1.20 1.00 1.20
Year Forecasted Project Cash Flow (RM million) Project AXA Project BYB 0 1 2 3 4 (3.40) 0.80 1.20 1.30 0.60 (3.50) 1.20 1.00 1.20 0.60 5 6 No. of Firm Shares (million) Note: Cash flow in Year 0 is Initial Capital The above information shows the forecasted cash flows of projects (AXA dan BYB) for the next 4 years. Based on the information: (i) Compute the Net Present Value (NPV) of projects (AXA and BYB) based on financing cost (discount rate) of 5% per year. Which is a better project? (ii) How much is the increase in price per share of the firm based on the NPV. (iii) Compute the internal rate of return (IRR) for each project. Explain the relationship between IRR and financing cost
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