Question: Please help : Question 1_(50 points) Pak Andi and Bu Indah are finance officers in PT Sukamaju Tbk., an Indonesian firm located in Semarang. They

Please help :

Please help : Question 1_(50 points) Pak Andi and Bu Indah are

Question 1_(50 points) Pak Andi and Bu Indah are finance officers in PT Sukamaju Tbk., an Indonesian firm located in Semarang. They are analyzing the proposed two business projects of the firm. They reasonably estimate that the cash flows of those projects shall be: Year Project Garuda Project Nusantara IDR 700,000,000 IDR 800,000,000,000 2 IDR 800,000,000 IDR 400,000,000,000 3 IDR 500,000,000 IDR 600,000,000,000 4 IDR 900,000,000 IDR 500,000,000,000 They count that the initial investments required for project Garuda is IDR 1,000,000,000 and for project Nusantara is IDR 1,000,000,000,000. The initial estimate of the appropriate discount rate for both projects is 17 percent. As a new hire, you are required to help them in capital budgeting analysis. a) Calculate the NPV and IRR for both projects! (20 points) b) According to the answers in a), which project shall be accepted? (10 points) c) Explain the potential problems in the capital budgeting analysis in this situation! (10 points) d) How the answers in a) could change if those projects' risks are significantly different! (10 points)

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