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1.What is the NPV for the following project if its cost of capital is 15 percent and its initial after-tax cost is RM5,000,000 and it is expected to
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# 1.What is the NPV for the following project if its cost of capital

is 15 percent and its initial after-tax cost is RM5,000,000 and it is expected to provide after-tax operating cash inflows of RM1,800,000 in year 1, RM1,900,000 in year 2, RM1,700,000 in year 3 and RM1,300,000 in year 4?

2.A firm has a degree of combined or total leverage of 1.25. Price per unit is RM15 and the quantity output is equal to 200,000 units. Interest expense is RM10,000 and fixed costs are RM270,000. Calculate the variable cost per unit.

3.WKW Berhad is analyzing a project that requires an initial investment of RM10,000, follows by cash inflows of RM1,000 in Year 1, RM4,000 in Year 2, and RM15,000 in Year 3. The cost of capital is 10%. What is the profitability index of the project?

4.Your firm is planning to pay a 15% stock dividend. The market price for the stock has been RM84. Based on the equity portion of your firms balance sheet before the stock dividend, the common stock par value with a 2 million shares outstanding and RM4 par value is RM 8,000,000, paid in capital is RM16,000,000, retained earnings is RM30,000,000 and the total equity is RM54,000,000. Which of the following would result from payment of the stock dividend?

5.Seroja Mills is reviewing its financial condition. Sales are RM18 million from which the firm generated an operating profit of RM5,220,000 and a net profit after tax of RM2,622,000. If the interest expense is RM850,000, what is the degree of financial leverage?

6.Sitis Store is reviewing its financial condition. Sales are RM16 million, variable costs is RM8,000,000 and fixed costs is RM4,000,000. Interest expense is RM1,500,000. The net profit after tax is RM1,250,000. What is the degree of combined leverage?

7.Mamamia Berhad is considering a three year project that has a cost of RM75,000. The project will generate after tax cash flows of RM33,100 in Year 1, RM31,500 in Year 2, and RM31,200 in Year 3. Assume that the discount rate is 10% and that the tax rate is 40%. What is the payback period of the project?

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