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(Solved) : Question 1 Azalea Berhad Considering New Project Project Require Rm400 000 New Fixed Asset Q34214623

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Answer to Question 1 Azalea Berhad is considering a new project. The project will require RM400,000 for new fixed assets, RM150,00…

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Question 1
Azalea Berhad is considering a new project. The project willrequire RM400,000 for new fixed assets, RM150,000 for additionalinventory and RM35,000 for additional accounts receivable. Shortterm debt is expected to increase by RM100,000. The project has afive-year life. The fixed assets will be depreciated straight-lineto a zero-book value over the life of the project.

At the end of the project, fixed assets can be sold for 25% oftheir original cost. The net working capital returns to itsoriginal level at the end of the project. The project is expectedto generate annual sales of RM555,000 and cost ... View full description