Question

In: Finance

Bumi Hijau Properties is in the process of deciding to develop an apartment project in Shah...

Bumi Hijau Properties is in the process of deciding to develop an apartment project in Shah Alam. The initial outlay for both projects is RM480,000. The cost of capital is 12%. Below are the expected cash flows from the two projects.

Year

Suria Apartment Project

(RM)

Puncak Apartment Project (RM)

1

180,000

165,000

2

210,000

190,000

3

180,000

260,000

4

310,000

345,000

5

278,000

310,000

Required:

  1. Based on the above information, you are required to calculate:
    1. Payback period for both projects
    2. Net present value (NPV) for both projects.
    3. Profitability index for both projects
  2. Which project should be accepted and why? Please state your reason.

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Bumi Hijau Properties is in the process of deciding to develop an apartment project in Shah...
Bumi Hijau Properties is in the process of deciding to develop an apartment project in Shah Alam. The initial outlay for both projects is RM480,000. The cost of capital is 12%. Below are the expected cash flows from the two projects. Year Suria Apartment Project (RM) Puncak Apartment Project (RM) 1 180,000 165,000 2 210,000 190,000 3 180,000 260,000 4 310,000 345,000 5 278,000 310,000 Required: a. Based on the above information, you are required to calculate: i. Payback period...
Project on mechanical properties
Project on mechanical properties
As manager of Precision Properties, you are considering the purchase of an apartment complex. The following...
As manager of Precision Properties, you are considering the purchase of an apartment complex. The following assumptions are made: • The purchase price is $2,000,000. • Potential gross income (PGI) for the first year of operations is projected to be $320,000. • PGI is expected to increase at 4 percent per year. • No vacancies are expected. • Operating expenses are estimated at 38 percent of effective gross income. Ignore capital expenditures. • The market value of the investment is...
The goal: the project goal is to develop implementable process change for reporting a human performance...
The goal: the project goal is to develop implementable process change for reporting a human performance event that satisfies the needs of all stakeholders of SIEMENS COMPANY ASSIGNMENT: Provide a forecast model and two page report on "human performance event" , that would analyze incidents and metrices to inhance safety protocol of Siemens IndustrY (Siemen field service ) .
(a) On 1 July 2018, Zahid rented out his properties as follows: (i) An apartment was...
(a) On 1 July 2018, Zahid rented out his properties as follows: (i) An apartment was rented to Abdul Qadir at a monthly rent of Rs. 40,000. Zahid received a non-adjustable security deposit of Rs. 300,000 which was partly used to repay the non-adjustable security deposit amounting to Rs. 175,000 received from the previous tenant in July 2013. He also spent Rs. 20,000 on repairs of the apartment in February 2019. (ii) A bungalow was rented to a bank. Zahid...
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project. Use the following information for the project evaluation and analysis:         - The initial costs are $900,000 for fixed assets. The fixed assets will be depreciated straight line to a zero book value over the 3-year life of the project. The fixed assets have an estimated salvage value of $60,000 at the end of the project.         - The project also requires an additional $200,000 for net working capital. All of the...
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project. Use the following information for the project evaluation and analysis:         - The initial costs are $900,000 for fixed assets. The fixed assets will be depreciated straight line to a zero book value over the 3-year life of the project. The fixed assets have an estimated salvage value of $60,000 at the end of the project.         - The project also requires an additional $200,000 for net working capital. All of the...
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project. Use the following information for the project evaluation and analysis:         - The initial costs are $900,000 for fixed assets. The fixed assets will be depreciated straight line to a zero book value over the 3-year life of the project. The fixed assets have an estimated salvage value of $60,000 at the end of the project.         - The project also requires an additional $200,000 for net working capital. All of the...
23.   A firm is deciding on a new project. Use the following information for the project...
23.   A firm is deciding on a new project. Use the following information for the project evaluation and analysis:         - The initial costs are $900,000 for fixed assets. The fixed assets will be depreciated straight line to a zero book value over the 3-year life of the project. The fixed assets have an estimated salvage value of $60,000 at the end of the project.         - The project also requires an additional $200,000 for net working capital. All of...
6. A firm is deciding on a new project. Use the following information for the project...
6. A firm is deciding on a new project. Use the following information for the project evaluation and analysis: - The initial costs are $450,000 for fixed assets. The fixed assets will be depreciated straight line to a zero book value over the 3-year life of the project. The fixed assets have an estimated salvage value of $30,000 at the end of the project. - The project also requires an additional $100,000 for net working capital to start the project....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT