PAER 1 SET 1

PAYBACK PERIOD
PROJECT TATITU PROJECT WAWIWU
PP=IO/CASH PP=IO/CASH
PP=RM450000/RM120000 PP=3years+(RM500000+RM455000)/RM180000
PP=3.75 @ 3 years 9 months PP=3.25 @ 3 years 3months

NET PRESENT VALUE

YEAR CASH FLOW CASH FLOW PVIF PRESENT PRESENT

PROJECT PROJECT 1/(1+0.14)n VALUE VALUE
TATITU(RM) WAWIWU(RM) PROJECT PROJECT
TAITU(RM) WAWIWU(RM)
0 (450000) (500000)
1 120000 140000 0.877 105240 122780
2 120000 153000 0.769 92280 117657
3 120000 162000 0.675 81000 109350
4 120000 180000 0.592 71040 106560
5 120000 - 0.519 62280
6 120000 - 0.456 54720
TOTAL PRESENT VALUE 466560 456347
(-)INITIAL OUTLAY (450000) (500000)
NET PRESENT VALUE 16560 (43653)

IRR
PROJECT TATITU
Cash flow Cash flow after taxes Present value factor Present Value
(RM) at 13%

Year 1 120000 0.885 106200

Year 2 120000 0.783 93960

Year 3 120000 0.693 83160

Year 4 120000 0.613 73560

Year 5 120000 0.543 65160

Year 6 120000 0.480 57600

Present value 479640

IO (450000)

NPV 29640
Cash flow Cash flow after taxes Present value factor Present Value
(RM) at 16%

Year 1 120000 0.862 103440

Year 2 120000 0.743 89160

Year 3 120000 0.641 76920

Year 4 120000 0.552 66240

Year 5 120000 0.476 57120

Present value 120000 0.410 49200

Present value 442080

IO (450000)

NPV (7920)

Discount rate Present value

13% 479640 479640

IRR 450000

16% 442080

3% 37560 29640

Cash flow Cash flow after taxes Present value factor PRESENT VALUE
(RM) at 10%

Year 1 140000 0.909 127260

Year 2 153000 0.826 126378

Year 3 162000 0.751 121662

Year 4 180000 0.683 122940

Present value 498240

IO 500000

NPV (1760)

Cash flow Cash flow after taxes Present value factor PRESENT VALUE
(RM) at 9%

Year 1 140000 0.917 128380

Year 2 153000 0.842 128826

Year 3 162000 0.772 125064

Year 4 180000 0.708 127440

Present value 509710

IO 500000

NPV 9710

DISCOUNT RATE PRESENT VALUE

9% 509710 509710
IRR 500000
10% 498240
1% 11470 9710

PROFITABILITY INDEX

PROJECT TATITU
PI=TPV/IO
PI=RM466560/RM450000
PI=1.0368

PROJECT WAWIWU
PI=TPV/IO
PI=RM456347/RM500000
PI=0.9127

We choose Project Tatitu because its net present value was higher and in a positive
value compare to Project Wawiwu.
PART 1 SET 2

PAYBACK PERIOD
PROJECT SCANNER PROJECT PRINTER
PP=IO/CASH PP=IO/CASH
PP=RM450000/RM100000 PP=3years+(RM460000-RM440000)/RM250000
PP=4.5@4years 6months PP=3.08years

NET PRESENT VALUE

YEAR CASH FLOW CASH FLOW PVIF PRESENT PRESENT

PROJECT PROJECT 1/(1+0.14)n VALUE VALUE
SCANNER PRINTER(RM) PROJECT PROJECT
(RM) SCANNER(R PRINTER(RM)
M)
0 (450000) (460000)
1 100000 120000 0.877 87700 105240
2 100000 140000 0.769 76900 107660
3 100000 180000 0.675 67500 121500
4 100000 250000 0.592 59200 148000
5 100000 - 0.519 51900 -
6 100000 - 0.456 45600 -
TOTAL PRESENT VALUE 388800 482400
(-)INITIAL OUTLAY (450000) (460000)
NEY PRESENT VALUE (61200) 22400

PROFITABILITY INDEX

PROJECT SCANNER
PI=TPV/IO
PI=RM388800/RM450000
PI=0.864

PROJECT PRINTER
PI=TPV/IO
PI=RM482400/RM460000
PI=1.049

We should Project Printer as the payback period was more faster than the Project
Scanner. Furthermore, the net present value of Project Printer was high and positive
in value compare to Project Scanner. The Project Printer more profitable than the
Project Scanner as the value was more than 1.
PART 1 SET 3

PAYBACK PERIOD
PROJECT MEME
PP=IO/CASH
PI=2years+(RM200000-RM195000)/RM105000
PI=2 years+RM5000/RM105000
PI=2.05years

PAYBACK PERIOD
PROJECT LELE
PP=IO/CASH
PI=2years+(RM210000-RM200000)/RM110000
PI=2 years+RM1000/RM110000
PI=2.01years

NET PRESENT VALUE

YEAR CASH FLOW CASH FLOW PVIF PRESENT PRESENT

PROJECT PROJECT 1/(1+0.14) VALUE VALUE
MEME(RM) LELE(RM) PROJECT PROJECT
MEME(RM) LELE(RM)
0 (200000) (210000)
1 95000 91000 0.877 83315 79807
2 100000 109000 0.769 76900 83821
3 105000 110000 0.675 70875 74250
4 110000 110000 0.592 65120 65120
5 110000 115000 0.519 59685 59685
TOTAL PRESENT VALUE 355895 362683
(-)INITIAL OUTLAY (200000) (210000)
NET PRESENT VALUE 155895 152683

PROFITABILITY INDEX
PROJECT MEME
PI=TPV/IO
PI=RM355895/RM200000
PI=1.78

PROJECT LELE
PI=TPV/IO
PI=RM362683/RM210000
PI=1.73

We should Project Meme as the net present value of Project Printer was high in
value compare to Project Lele. The Project Meme more profitable than the Project
Lele.
PART 1 SET 4

NET PRESENT VALUE

YEA CASH FLOW CASH FLOW PVIF PRSENT PRESENT

R WISH GMAT 1/(1+0.10) VALUE VALUE
MACHINE(RM MACHINE(RM n
WISH GMAT
) ) MACHINE(RM MACHINE(RM
) )
0 (30000) (30000)
1 11500 10500 0.909 10453.50 9544.50
2 11500 10500 0.826 9499 8673
3 11500 9500 0.751 8636.50 7134.50
TOTAL PRESENT VALUE 28589 25352
(-) INITIAL OUTLAY (30000) (30000)
NET PRESENT VALUE (1411) (4648)

PAYBACK PERIOD
TT PROJECT
PP=IO/CASH
PP=RM125000/RM35000
PP=3.57 years

KK PROJECT
PP=IO/CASH
PP=3years+(RM125000-RM117000)/RM50000
PP=3 years+RM8000/RM50000
PP=3.16years
PART 1 SET 5

PAYBACK PERIOD
PROX
PP=IO/CASH
PP=3years+(RM26000-RM17500)/RM21000
PP=3.40years

PROY
PP=IO/CASH
PP=3years+(RM26000-RM20792)/RM23938
PP=3.22years

IRR
PRO X
Cash flow Cash flow after taxes Present value factor Present Value
(RM) at 13%

Year 1 6500 0.885 5752.50

Year 2 6000 0.783 4698

Year 3 5000 0.693 3465

Year 4 21000 0.613 12873

Present value 26788.5

IO (26000)

NPV 788.50

Cash flow Cash flow after taxes Present value factor Present Value
(RM) at 15%

Year 1 6500 0.870 5655

Year 2 6000 0.756 4536

Year 3 5000 0.658 3290

Year 4 21000 0.572 12012

Present value 25493

IO (26000)

NPV (507)

DISCOUNT RATE PRESENT VALUE

13% 26788.5 26788.5
IRR 26000
15% 25493
2% 1295.50 788.50
Cash flow Cash flow after taxes Present value factor Present Value
(RM) at 19%

Year 1 6582 0.840 5528.88

Year 2 7219 0.706 5096.61

Year 3 6991 0.593 4145.66

Year 4 23938 0.499 11945.06

Present value 26716.21

IO (26000)

NPV 716.21

Cash flow Cash flow after taxes Present value factor Present Value
(RM) at 21%

Year 1 6582
Year 2 7219
Year 3 6991
Year 4 23938
Present value

IO (26000)

NPV

DISCOUNT RATE PRESENT VALUE

13% 26788.5 26788.5
IRR 26000
15% 25493
2% 1295.50 788.50

PART1 SET6(PART1 SET4)

PART 2 SET 1
OLD MACHINE RM NEW MACHINE RM
COST OF MACHINE 20000 COST OF NEW MACHINE 20000
CURRENT MARKET VALUE 10000 TRANSPORTATION COST 2000
DEPRECIATION EXPENSES 2000 each INSTALLATION COST 1000
year
BOOK VALUE 8000 SALE PRICE AT 5TH YEAR 1000
SAVE SALARY 5000 ADDITIONAL INVENTORY WIP
COST OF DAMAGES 2000 USEFUL LIFE 5 YEARS
MAINTENANCE COST 3000
TAX RATE : 25% , RATE OF RETURN : 10%

INITIAL OUTLAY
RM RM
Cost of machine 20000
(+) installation cost 2000
Transportation cost 1000
Cost of the machine installed 23000
(+) additional work in progress 2500
25500
(+) tax on sales on machine 10000
Profit on sales (500)
Income on sales old machine 9500
(+) investment tax credit (10% x RM23000 x 25%) 575 (10075)
INITIAL OUTLAY 15425

*CALCULATION OF OLD MACHINE

NPV=RM8000
CURRENT MARKET VALUE=RM10000
TAX OLD MACHINE(market price - NBV)
RM10000-RM8000=RM2000 X 25%=RM500

ANNUAL CASH FLOW

Depreciation for new machine = (RM23000-RM1000)/5 years = RM4400

ACCOUNTING PROFIT(RM) CASH FLOW(RM)

SAVING:
SALARY 5000 5000
COST OF DAMAGES 2000 2000
7000 7000
COST:
MAINTENANCE (3000) (3000)
DEPRECIATION (2000- (2400) -
4400)
CASH FLOW BEFORE TAX 1600 4000
TAX (25% X 1600) (400) (400)
NET CASH FLOW 3600

TERMINAL CASH FLOW

=RM3600+RM2500+(RM1000 X 0.75)
=RM6850

YEARS NET CASH FLOW(RM)

0 (15425)
1 3600
2 3600
3 3600
4 3600
5 6850

PART2 SET2