Sydney Harbor Inc. Sydney Harbor Inc. is evaluating the following projects proposal: The project cost is RM3.5
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Question:
Sydney Harbor Inc.
Sydney Harbor Inc. is evaluating the following project's proposal:
The project cost is RM3.5 M, with additional fixed asset purchase of RM0.5M.
The operating cash flows of the project are as follows:
Year | |
1 | RM 1,750,000.00 |
2 | RM 1,800,000.00 |
3 | RM 2,500,000.00 |
4 | RM 1,500,000.00 |
5 | 20% of the project cost |
At the termination of the project, 40% of the fixed asset cost is to be recovered . The company's cost of capital is 5.14% p.a.
Based on Capital Budgeting Techniques,
1; The initial outlay of the project is RM____________
2; The terminal value is RM______
3; The PV of the OCF in Year 2 is RM_______
4The PV of the OCF in Year 4 is RM____________.
5; .The FV of the OCF in Year 3 is RM____________________.
Related Book For
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
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