OUESTION ONE:

ETM Co is considering two different projects. Project A is a local project with all cash flows in kwacha while project $B$ is a foreign project with cash flows in US dollars.

Project A:

This involves producing a new product using a new equipment which will be acquired immediately at a cost of K$530,000.$ The asset will last for $4$ years after which the scrap value will be K$40,000.$

Forecast sales units, selling prices, and production costs in money terms due to the new product are as follows;

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