Question: this question using abive formula QUESTION 2 Sri Chondong is considering two (2) mutually exclusive projects. The cost of capital is 10 percent per annum

this question using abive formula

QUESTION 2 Sri Chondong is considering two (2) mutually exclusive projects. The cost of capital is 10 percent per annum and the estimated cash flows are as follows: Year Project Merbau (RM) Project Pulai (RM) O 500,000 220,000 150,000 110,000 150,000 AWN- 100,000 150,000 70,000 150,000 50,000 @ Hak Cipta Universiti Teknologi MARA BA/JUL 2024/FIN242/262/260 a) Calculate: ) the payback period for both projects. i) the Net present value (NPV) for both projects. iii) the internal rate of return for Project Merbau. Do interpolation. iv) Which project should the firm choose? State the reason. (14 marks) b) Briefly explain the advantages and disadvantages of profitability index (PI) used in capital budgeting. (6 marks)

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