LEXUS BERHAD

Lexus Berhad is considering two mutually exclusive projects, A and B.

Project A costs RM80,000, with additional working capital of RM15,000. The project is expected to generate RM65,000 in year one and RM75,000 in year two, and final disbursement in year 3 is 30% of the project cost.

Project B costs RM120,000, inclusive of purchase of fixed asset of RM20,000. The cash flows are RM64,000 in year one, RM67,000 in year two, RM56,000 in year three, and RM45,000 in year four. At the termination of the project, 50% of the fixed asset value can be recovered.

The firm's required rate of return and reinvestment rate for these projects is 7.25%.

Note: reinvestment value refers to future value

11. The MIRR of project A is ______

12. The PV of project B's cash flow in year 3 is RM___________

13. The PV of project B's cash flow in year 4 is RM___________

14. Total PV of project B's cash flows is RM

15. The Discounted Payback Period for project B is _________ years.