Question: QUESTION 1 Sudin Sdn Bhd has the expected cash flow details for three projects as follows: Expected Cash Flow (RM) Year Project A Project B
QUESTION 1
Sudin Sdn Bhd has the expected cash flow details for three projects as follows:
| Expected Cash Flow (RM) | |||
| Year | Project A | Project B | Project C |
| 0 | (18,000) | (24,000) | (36,400) |
| 1 | 4,000 | 10,000 | 0 |
| 2 | 10,000 | 8,000 | 10,000 |
| 3 | 2,000 | 8,000 | 20,000 |
| 4 | 8,000 | 4,000 | 24,000 |
The company's required rate of return for the three projects is 12%
Required:
- For each of the projects, calculate the following:
- Payback period (6 marks)
- Net present value (NPV) (6 marks)
- Internal rate of return (IRR) (6 marks)
- Based on the result above, which project(s) (under mutually exclusive) would you recommend? (2 marks)
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