Question 1 Bunga Cengkih Berhad is estimating the outcome of a project as follows: Item Selling...
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Question 1 Bunga Cengkih Berhad is estimating the outcome of a project as follows: Item Selling price Variable cost Fixed cost Expected sales Value RM50 RM30 RM300,000 30,000 unit per year You are aware that some of these estimations are subjects to error. Suppose that each variable may turn out to be either 10% higher or 10% lower than the initial estimation. The project will last for 5 years and requires an initial investment of RM500,000 which will be depreciated straight line over the project life to a zero-salvage value. Firm's tax rate is 21% and the required rate of return is 12%. Question 1 Bunga Cengkih Berhad is estimating the outcome of a project as follows: Item Selling price Variable cost Fixed cost Expected sales Value RM50 RM30 RM300,000 30,000 unit per year You are aware that some of these estimations are subjects to error. Suppose that each variable may turn out to be either 10% higher or 10% lower than the initial estimation. The project will last for 5 years and requires an initial investment of RM500,000 which will be depreciated straight line over the project life to a zero-salvage value. Firm's tax rate is 21% and the required rate of return is 12%.
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