Question: 2. A firm is considering a RM5,000 project that will generate an annual cash ow of RM1,000 for the next 8 years. The firm has

2. A firm is considering a RM5,000 project that will generate

2. A firm is considering a RM5,000 project that will generate an annual cash ow of RM1,000 for the next 8 years. The firm has the following financial data: Debt/equity ratio is 50%. Cost of equity capital is 15%. Cost of new debt is 9%. Tax rate is 33%. Determine the project's net present value (NPV) and whether or not to accept it. [6 marks]

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