Question: Mawar Putih Bhd. is considering three mutually exclusive proposals with the cost of capital of 10%. The proposal cash flows are summarized as follows:
Mawar Putih Bhd. is considering three mutually exclusive proposals with the cost of capital of 10%. The proposal cash flows are summarized as follows: Proposal W (RM) Initial Investment 25,000 Proposal Q (RM) 23,000 Proposal V (RM) 20,000 Year 1 9,742 4,641 8,000 Year 2 9,742 4,641 8,000 Year 3 9,742 4,641 8,000 Year 4 0 4,641 8,000 Year 5 0 4,641 0 Year 6 0 4,641 0 Year 7 0 4,641 0 Year 8 0 4,641 0 Year 9 0 4,641 0 a) You are required to calculate and choose the proposal that Mawar Putih should proceed by using: i) Payback Period technique ii) Net Present Value technique iii) Internal Rate of Return technique b) As an overall, decide the best proposal that Mawar Putih should engage. Explain your answer. Prince Corp. is considering two mutually exclusive equipment for their business activities. The two alternatives equipment provides the following set of after tax net cash flows: Initial Outlay Inflow year 1 Inflow year 2 Inflow year 3 Inflow year 4 Equipment A (RM) 80,000 0 0 0 160,000 0 Equipment B (RM) 90,000 30,000 30,000 30,000 30,000 30,000 Inflow year 5 The required rate of return for this corp. is 14 percent. a) Calculate and determine the best equipment for Prince Corp. under the following techniques: i) Payback Period ii) Net Present Value iii) Profitability Index iv) Internal Rate of Return
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