Continued... Question 2 a) Sang Bulan Sdn. Bhd. utilizes the payback method to evaluate the following investment proposals. 25 BEN SMARCH Year 1 2 Cash inflows (RM) Project A Project B Initial Outlay - RM100,000 Initial Outlay RM500,000 25.000 125.000 25.000 120.000 25.000 200.000 25.000 250.000 25.000 100.000 4 5 i. Compute the payback period for both projects. (4 marks) i. Suppose these two projects are mutually exclusive. Which projects) should Sang Bulan accept? (2 marks) iii. List and explain TWO limitations of payback method. (3 marks) b) Impian Rian Sdn. Bhd expects to generate the following cash flows from a RM1,000,000 investments: Year Net Cash Inflows (RM) 0 1 2 3 4 5 (1.000.000) 100,000 400.000 500.000 300.000 100.000 You are required to compute: i Net present value of the investment if the form estimates its cost of capital to be 106 (5 marks) Continued... ii. Profitability index (4 marks)