i. State, whether each of the following items isrelevant or irrelevant cashflows for a netpresent value...

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i. State, whether each of the following items isrelevant or irrelevant cashflows for a netpresent value (NPV) evaluation of whether to introduce the computerized tracking system. a. Computerized tracking system investment of RM2,100,000; b. Depreciation of RM420,000 in each of the five years; c. Staff training costs of RM425,000; d. New staff total salary of RM120,000 per annum; e. Staff training costs of RM75,000; f. The interest cost of RM150,000 per annum ii. Calculate the following values if the computerized system is implemented a. Incremental sales in Year 1; b. c. iii. [6 marks] Savings in vehicle running costs in Year 1; Present value of the maintenance costs over the life of the contract (annuity factorfor 5 years at 10% is 3.791) [6 marks] Grabby wishes to maximize the wealth of its shareholders. It has correctly calculated the following measures for the proposed computerized tracking system project: The internal rate of return (IRR) is 14%, The return on average capital employed (ROCE) is 20% and The payback period is four years. Based on the information above, do you think it is worthwhile for Grabby to take up the project? Explain why. [3 marks] i. State, whether each of the following items isrelevant or irrelevant cashflows for a netpresent value (NPV) evaluation of whether to introduce the computerized tracking system. a. Computerized tracking system investment of RM2,100,000; b. Depreciation of RM420,000 in each of the five years; c. Staff training costs of RM425,000; d. New staff total salary of RM120,000 per annum; e. Staff training costs of RM75,000; f. The interest cost of RM150,000 per annum ii. Calculate the following values if the computerized system is implemented a. Incremental sales in Year 1; b. c. iii. [6 marks] Savings in vehicle running costs in Year 1; Present value of the maintenance costs over the life of the contract (annuity factorfor 5 years at 10% is 3.791) [6 marks] Grabby wishes to maximize the wealth of its shareholders. It has correctly calculated the following measures for the proposed computerized tracking system project: The internal rate of return (IRR) is 14%, The return on average capital employed (ROCE) is 20% and The payback period is four years. Based on the information above, do you think it is worthwhile for Grabby to take up the project? Explain why. [3 marks]

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i a Relevant cash flow The initial investment of RM2100000 is relevant because it represents a cash ... View the full answer