Question: QUESTION 8 a). Cash flow on two mutually exclusive projects are as follows: Year 0 1 2 3 4 5 Project -RM110,000 20,000 20,000 40,000

QUESTION 8 a). Cash flow on two mutually exclusive projects are

QUESTION 8 a). Cash flow on two mutually exclusive projects are as follows: Year 0 1 2 3 4 5 Project -RM110,000 20,000 20,000 40,000 40,000 40,000 Project B -RM120,000 0 0 60,000 60,000 60,000 You require 6% return on your investment. i). If you apply payback criterion, which project will you choose? Why? (6 marks) ii). Calculate the NPV and PI for both projects. Which project to choose? Why? (6 marks)

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