Transcribed Image Text
Serdang Corp. is considering anengineering project that requires an investment of RM220,000 and isexpected to generate the following stream of payments (income) inthe future. Year Payment 1 RM63,000 2 RM69,500 3 RM32,900 4 RM79,750 5 RM62,400 6 RM38,550a. If the cost of capitalis 15%, does the present value of expected cash inflows exceed thevalue of the investment that has to be made today?b. Use linearinterpolation method to find the interest rate at which the companywould be just indifferent to the project.c. Find the discounted payback period.