Melati Sdn.Bhd. is taking into consideration a project which requires an initial outlay of RM380,000. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Melati Sdn.Bhd. is taking into consideration a project which requires an initial outlay of RM380,000. The cash flows expected from the project are as follows: Year Cash flow (RM) 1 100,000 2 3 4 5 120,000 110,000 100,000 110,000 The cost of capital for this project is 10%. (a) Calculate the payback period for this project. (2) (b) Calculate the net present value and determine whether the project should be accepted or rejected. (10) (c) Explain the advantages and disadvantages of using the net present value technique in evaluating a project. (8) Melati Sdn.Bhd. is taking into consideration a project which requires an initial outlay of RM380,000. The cash flows expected from the project are as follows: Year Cash flow (RM) 1 100,000 2 3 4 5 120,000 110,000 100,000 110,000 The cost of capital for this project is 10%. (a) Calculate the payback period for this project. (2) (b) Calculate the net present value and determine whether the project should be accepted or rejected. (10) (c) Explain the advantages and disadvantages of using the net present value technique in evaluating a project. (8)
Expert Answer:
Answer rating: 100% (QA)
a To calculate the payback period we need to determine the time it takes for the cumulative cash inflows to equal or exceed the initial outlay of RM38... View the full answer
Related Book For
Business Statistics For Contemporary Decision Making
ISBN: 978-1118749647
8th edition
Authors: Black Ken
Posted Date:
Students also viewed these finance questions
-
The equilibrium constant, Kp, for the following reaction is 0.215 at 673 K: NH4I(S) NH3(g) + HI(g) Calculate the equilibrium partial pressure of HI when 0.386 moles of NH4I(s) is introduced into a...
-
A textile company obtains samples of fabrics from a production line and observes their colors. Suppose one has a box of ten fabrics (4 are white, 3 are red, and 3 are black). One selects five fabrics...
-
The introduction of a new product requires an initial outlay of $60 000. The anticipated net returns from the marketing of the product are expected to be $12 000 per year for 10 years. Find the rate...
-
96. A 66-year-old woman with a long history of heavy smoking presents to her doctor with complaints of shortness of breath and chronic coughing that has been present for about 2 years and has been...
-
The acceleration due to gravity of a particle falling toward the earth is a = ?gR2/r2, where r is the distance from the center of the earth to the particle, R is the radius of the earth, and g is the...
-
A compound epicyclic gear train is shown in Fig.15.48 The gears \(A, D\) and \(E\) are free to rotate on axis \(P\). The compound gear \(B\) and \(C\) rotate together on axis \(Q\) at the end of arm...
-
What questions to ask a witness in a deposition?
-
Exit gas from a chlorinator consists of a mixture of 20 mol% chlorine in air. This concentration is to be reduced to 1% chlorine by water absorption in a packed column to operate isothermally at 20C...
-
Diva, Inc. is a privately held furniture manufacturer. For August 2020, Diva had the following standards for one of its products, a wicker chair: (Click the icon to view the standards.) (Click the...
-
A number of cities are arranged on a graph that has been divided up like an ordinary Cartesian plane. Each city is located at an integral (x, y) coordinate intersection. City names and locations are...
-
What is E-Waste and why is it a problem? Conduct research on E-Waste and then post a reflective posting regarding the why and suggest a solution. Include your sources.
-
Name four divisions of the AICPA that have a direct impact on auditing.
-
Steam Clean, Inc., produces unique washing machines under a license agreement with Tom Nessinger, who invented the unique process. Nessinger has engaged you to audit the sales of Steam Clean, Inc.,...
-
Identify four private sector organize ions associated with the public accounting profession and briefly desciibe their principal activities.
-
Becky Maupin, CPA, has been asked to compile the financial statements of George's Diner, a nonpublic company, for the year ended April 30, 19X5. a. What understanding should Maupin establish with...
-
In a small group, have each individual take on the role as spokesperson for the American Federation of State County and Municipal Employees, the Service Employees International Union, and the America...
-
1. Laverne purchases a call option on XOM with a strike price of $90.00.XOM is already trading at $91.00 per share.Laverne pays a premium of $1.65 for the call, which expires in three months.If XOM...
-
Do animals have rights? If so, what are they? What duties do human beings have toward animals? Does KFC protect animal welfare at an acceptable level?
-
Based on annual driving of 15,000 miles and fuel efficiency of 20 mpg, a car in the United States uses, on average, 750 gallons of gasoline per year. If annual automobile fuel usage is normally...
-
Interpret the following Excel output. Discuss the structure of the experimental design and any significant effects. Alpha is.05. Anova: Two-Factor with Replication ANOVA Source of Variation SS df MS...
-
A random sample of size 20 is taken, resulting in a sample mean of 16.45 and a sample standard deviation of 3.59.Assume x is normally distributed and use this information and = .05 to test the...
-
A nurse at a medical center claims that the median number of flu shots they give per day is 30. To test the claim, the nurse randomly selects 20 days during the months of September, October, and...
-
The Pennsylvania Turnpike Commission allows travelers to use a purchased Easy Pass for tolls on the Pennsylvania Turnpike. A researcher hypothesizes that the median of the number of Easy Pass users...
-
Two independent random samples of army and marine recruits are selected, and the time in minutes it takes each recruit to complete an obstacle course is recorded, as shown in the table. At...
Study smarter with the SolutionInn App