Question

Lexus Berhad is considering two mutually exclusive projects, A and B. Project A costs RM95,000 and is expected to generate RM65,000 in year one and RM75,000 in year two.  Project B costs RM120,000 and is expected to generate RM64,000 in year one, RM67,000 in year two,RM56,000 in year three, and RM45,000 in year four. The firm's required rate of return and reinvestment rate for these projects is 7.25%.  

1. The PV of cash flow for Project A in year 1 is 
2. The PV of cash flow for Project A in year 2 is
3. Total PV of project A's cash flows is 
4. The Discounted Payback Period for project A is _________ years
5. The NPV of project A is
6. The IRR of project A is __%. 
7. The value of project A's cash flow reinvestment in year 1 is __________.
8. The value of project A's cash flow reinvestment in year 2 is __________.
9. The MIRR of project A is ______%.

Answer 1

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