ZEF Incorporated is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the following table. The firm’s cost of capital is based on answer in questiona) above Project M (RM) Project N (RM) Initial Investment (RM) 28,500 27,000 Year Cash Flow (RM) 1 10,000 11,000 2 10,000 10,000 3 10,000 9,000 4 10,000 8,000 b. Calculate the payback period for each project. The maximum allowable payback period set by the company for all projects is 3 years. Note: No hand writing !

ZEF Incorporated is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the...

ZEF Incorporated is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the following table. The firm’s cost of capital is based on answer in question

a) above

	Project M (RM)	Project N (RM)
Initial Investment (RM)	28,500	27,000
Year	Cash Flow (RM)
1	10,000	11,000
2	10,000	10,000
3	10,000	9,000
4	10,000	8,000

b. Calculate the payback period for each project. The maximum allowable payback period set by the company for all projects is 3 years.

Note: No hand writing !

Jun 04, 2022

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ZEF Incorporated is in the process of choosing the better of two equal-risk, mutually exclusive capital expenditure projects—M and N. The relevant cash flows for each project are shown in the...

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