QUESTION 1 Satay Express is considering two mutually exclusive projects. The required rate of return on these projects is 9%. The maximum allowable payback period for the project is 4 years. The two projects provide the following set of cash flows: Year Project A (RM) Project B (RM) 0 -500,000 -500,000 Cash Flow (RM) 1 120,000 132,000 2 130,000 132,000 3 140,000 132,000 4 150,000 132,000 5 150,000 132,000

IV. Calculate the IRR for each project. (4 marks) V. Based on the answer in (a) (d), explain briefly which project should be accepted. (3 marks) VI. If this is independent project, how would your answer in (v) will change? (3 marks)