Suppose that your company has decided to invest RM316 million in a 5-year construction project. The...

 

Transcribed Image Text:

Suppose that your company has decided to invest RM316 million in a 5-year construction project. The project is expected to be sold for RM200 million once completed. Estimate the Internal Rate of Return (IRR) with the anticipated net profit shown in Table 1. (You can provide a range for IRR. The IRR is below 10%) Table 1: Anticipated net profit/ Jadual 1: Keuntungan bersih yang dijangkakan End of year/ Hujung tahun 0 1 2 3 4 5 Net profit (Rm million)/ Keuntungan bersih (RM juta) 0 -50 -20 Suppose the interest rate for the project mentioned the required amount. +50 +100 +150 (10) above is fixed at 15% over the whole project duration. Calculate the yearly net income that must be generated to recover the capital investment and suggest two ways to achieve (6) Suppose that your company has decided to invest RM316 million in a 5-year construction project. The project is expected to be sold for RM200 million once completed. Estimate the Internal Rate of Return (IRR) with the anticipated net profit shown in Table 1. (You can provide a range for IRR. The IRR is below 10%) Table 1: Anticipated net profit/ Jadual 1: Keuntungan bersih yang dijangkakan End of year/ Hujung tahun 0 1 2 3 4 5 Net profit (Rm million)/ Keuntungan bersih (RM juta) 0 -50 -20 Suppose the interest rate for the project mentioned the required amount. +50 +100 +150 (10) above is fixed at 15% over the whole project duration. Calculate the yearly net income that must be generated to recover the capital investment and suggest two ways to achieve (6)

Answer rating: 100% (QA)

To estimate the Internal Rate of Return IRR for the construction project we can use the anticipated ... View the full answer