Question: 2: Ocean Berhad is engaged in the exploration, development, and production of oil and gas, investment holding, and the provision of project management, technical and

2: Ocean Berhad is engaged in the exploration, development, and production of oil and gas, investment holding, and the provision of project management, technical and other services relating to the oil and gas exploration and production industry. The company is considering investing in two assets - A and B. The initial outlay, annual cash flows, and annual depreciation for each asset is shown in the table below for assets assumed five-year lives. The firm requires a 12% return on each of those equally risky assets. The maximum payback period is 4 years, and the minimum accounting rate of return is 30%. Initial Outlay Asset A Asset B RM , 000 RM .000 Year Cash Flow (RM) Depreciation (RM) Cash

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