Invest in any or all of the four projects whose relevant cash flows are given in...

 

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Invest in any or all of the four projects whose relevant cash flows are given in the following table. The firm has RM7,000,000 budgeted to fund these projects, all of which are known to be acceptable. Initial investment for each project is the same for all projects which is RM1,600,000. The rate of return for all projects is equivalent to 8%. Operating cash outflow Project X Project Y Year 1 Cash Outflow RM1,600,000 (for each project) Operating Cash Inflows RM 440,000 340,000 220,000 (110,000) ( 95,000 ) 105,000 220,000 388,000 RM 140,000 180,000 250,000 260,000 370,000 460,000 1 2. 3. 4. 5. 6. 7. 8. 9. Use this table for PROJECT X and Y Period PVIF 8% 1 0.9259 0.8573 3 0.7938 0.7350 5 0.6806 0.6302 7 0.5835 8. 0.5403 9. 0.5002 10 0.4632 Compute the following for each option. 1. The NPV for each projects 2. The ANPV for each investment projects 3. Payback period for all projects 4. Profitability index for all project 5. Recommend which projects is more favorable in terms of accept-reject or ranking decisions. Invest in any or all of the four projects whose relevant cash flows are given in the following table. The firm has RM7,000,000 budgeted to fund these projects, all of which are known to be acceptable. Initial investment for each project is the same for all projects which is RM1,600,000. The rate of return for all projects is equivalent to 8%. Operating cash outflow Project X Project Y Year 1 Cash Outflow RM1,600,000 (for each project) Operating Cash Inflows RM 440,000 340,000 220,000 (110,000) ( 95,000 ) 105,000 220,000 388,000 RM 140,000 180,000 250,000 260,000 370,000 460,000 1 2. 3. 4. 5. 6. 7. 8. 9. Use this table for PROJECT X and Y Period PVIF 8% 1 0.9259 0.8573 3 0.7938 0.7350 5 0.6806 0.6302 7 0.5835 8. 0.5403 9. 0.5002 10 0.4632 Compute the following for each option. 1. The NPV for each projects 2. The ANPV for each investment projects 3. Payback period for all projects 4. Profitability index for all project 5. Recommend which projects is more favorable in terms of accept-reject or ranking decisions.

Answer rating: 100% (QA)

Recommendation For Project X NPV is 92000 and is negative cash flowwhich means accepting Project X w... View the full answer