Please help me QUESTION 1Namelix Co. is considering which of three mutually exclusive projects it shouldundertake. The initial investment of Project A is RM 70,000, where the initialinvestment of Project B & C is RM20,000 respectively. Details of the projects' cashflows are given below.Project A20,00020,00020,000Project B4,6006,2008,00010,600Project C11,2008,6006,600Year120,000The company's cost of capital is consist of debt after tax of 4% and cost of equity of6%.la) Rank the projects based on THREE different analysis techniques :PaybackNet present valueIII. Internal rate of returnI.II.lb) Describe the process of capital budgeting.234

Payback period is the amount of time required to recover initial investment. Payback period =Initial…

Project A 20,000 20,000 20,000 20,000 Year Project B 4,600 6,200 8,000 10,600 Project C 11,200 8,600 6,600 1 2 3 4 The company's cost of capital is consist of debt after tax of 4% and cost of equity of 6%. la) Rank the projects based on THREE different analysis techniques : I Payback II. Net present value III. Internal rate of return Ib) Describe the process of capital budgeting

Project A 20,000 20,000 20,000 20,000 Year Project B 4,600 6,200 8,000 10,600 Project C 11,200 8,600 6,600 1 2 3 4 The company's cost of capital is consist of debt after tax of 4% and cost of equity of 6%. la) Rank the projects based on THREE different analysis techniques : I Payback II. Net present value III. Internal rate of return Ib) Describe the process of capital budgeting

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 4P

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