Part B

Please answer in typing, and include the formulas.

Question 1 Grey Berhad is considering two mutually exclusive projects namely Project Rainy and Project Snowy. Both projects having identical initial outlays of RM500,000 and useful lives of 5 years. Project Rainy is expected to produce an after-tax cash flow of RM150,000 each year. Project Snowy is expected to generate a single after-tax net cash flow of RM1,015.000 in year 5. The required rate af return is 15% From the Information given, you are required to answer the following questione. a. What is the Payback Period for each project? (2 Marks) b. Determine the Net Present Value for each project. (4 Marks) Computer the Internal Rate of Return for each project (2 Marks d. Which project should Grey Berhad proceed with? Explain your answer based on your barier finding in part (b) and (c). (2 Marks) (Total: 10 Marka)