QUESTION 4 (6+4 = 10%) a) T Co Ltd is considering investing in a project in Singapore. Initial estimates of the returns of the project have revealed the following figures: PROBABILITY RETURNS 5% 45% 50% 30% 30% 15% 10% -20% The current risk-free rate of return in the market is 6.5%. T Co board of directors has decided that infrastructure projects are risky in general and as such a risk premium of 10% is required. Should T Co invest in this project? Why or why not? Explain your answer. [Answer here] Use the formula sheet b) Calculate the cost of following trade credit terms, where payment is made on the net due date. (0) 2/10, net 35 (Answer and show workings here] Use the formula sheet (6) 2/15, net 45 [Answer and show workings here] Use the formula sheet 50% 30% 30% 15% 10% -20% The current risk-free rate of return in the market is 6.5%. T Co board of directors has decided that infrastructure projects are risky in general and as such a risk premium of 10% is required. Should T Co invest in this project? Why or why not? Explain your answer. [Answer here] Use the formula sheet b) Calculate the cost of following trade credit terms, where payment is made on the net due date. (0) 2/10, net 35 Answer and show workings here] Use the formula sheet (ii) 2/15, net 45 Answer and show workings here] Use the formula sheet (II) 3/15, net 30 Answer and show workings here] Use the formula sheet (iv) 4/10, net 40 Answer and show workings here) Use the formula sheet