ART B: SHOW YOUR CALCULATIONS. INTELEK Corporation is in the process of expansion its business operation. Provided below is the after-tax cash flows for both projects. Cost of capital will be 10%. Year Project A (RM) Project B (RM) 0 50,000 47,000 1 15,000 20,000 2 15,000 (10,000) 3 15,000 15,000 4 15,000 14,000 5 15,000 20,000 For each project, calculate: a) Payback Period and Net Present Value b) Suggest which project should the company invest , why? APPENDIX – TABLE TIME VALUE OF MONEY @ 10% Year PVIF (10%) PVIFA (10%) 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4 0.6830 3.1699 5 0.6209 3.7908

ART B: SHOW YOUR CALCULATIONS. INTELEK Corporation is in the process of expansion its business operation. Provided below is the after-tax cash flows for both projects. Cost of capital will be 10%. Year Project A (RM) Project B (RM) 0 50,000 47,000 1 15,000 20,000 2 15,000 (10,000) 3 15,000 15,000 4 15,000 14,000 5 15,000 20,000 For each project, calculate: a) Payback Period and Net Present Value b) Suggest which project should the company invest , why? APPENDIX – TABLE TIME VALUE OF MONEY @ 10% Year PVIF (10%) PVIFA (10%) 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4 0.6830 3.1699 5 0.6209 3.7908

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...

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