CONFIDENTIAL 6 BA/DEC 2019/FIN430 QUESTION 5 a) Maximum Inc. has two mutually exclusive projects to consider....

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CONFIDENTIAL 6 BA/DEC 2019/FIN430 QUESTION 5 a) Maximum Inc. has two mutually exclusive projects to consider. Each project will incur an initial cost of RM2,500,000. The discount rate for both projects is 12 percent. Below are the estimated incremental cash flows (RM) of the two proposed projects: Year Project A (RM) Project Z (RM) 1 550,000 1,100,000 2 850,000 1,100,000 3 1,000,000 1,100,000 4 1,500,000 1,100,000 5 2,000,000 1,100,000 i) Determine the Payback Period for each project. (4 marks) CONFIDENTIAL 6 BA/DEC 2019/FIN430 QUESTION 5 a) Maximum Inc. has two mutually exclusive projects to consider. Each project will incur an initial cost of RM2,500,000. The discount rate for both projects is 12 percent. Below are the estimated incremental cash flows (RM) of the two proposed projects: Year Project A (RM) Project Z (RM) 1 550,000 1,100,000 2 850,000 1,100,000 3 1,000,000 1,100,000 4 1,500,000 1,100,000 5 2,000,000 1,100,000 i) Determine the Payback Period for each project. (4 marks)

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To determine the Payback Period for each project we ... View the full answer