QUESTION 3 (25 MARKS) (UNIT 4) a) Why is the capital budgeting decision crucial and important for a firm? State why the capital budgeting errors are so costly? (6 marks) b) The JLK Corporation is considering an investment that will cost RM80,000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are RM25,000 per year and for the last two years they are RM20,000 per year. Calculate the payback period for this investment. (7 marks) c) Calculate the following project, at cost of capital of 10%. Years 0 1 2 3 4 5 Cash flow (RM) - 10,000 2,000 2,000 4,000 4,000 5,000 i) NPV (8 marks) ii) PI (2 marks) 111) Justified should we accept or reject the project? (2 marks)