Solar Energy Tech is planning to install solar panel to provide electricity for its waste processing plant. The installation is expected to take 4 years. The proposal from Company Green with projected operating net cash flows in year 1 is RM 54,000 and RM 54,800 in years 2. The amount is increasing by RM6000 each year through to year 4. The other proposal is from Company Big with projected operating net cash flows in year 3 are RM 85,000. The amount is reduced by RM4500 per year until year 1. The investing from Company Green is RM 230,000 and Company Big is RM 250,000. By using interest rate of 12% per year,

a) Breakdown a cash flow table. (3 marks) (CLO2:PLO12:C3)

b) Calculate the Net Present Value (NPV). Using the NPV technique, determine should the Solar Energy Tech invest in either of the two proposals and if so, which is preferable? (12 marks) (CLO3:PL012:C3)

c) Calculate the Payback Period for both proposals. Which project do you accept? Please justify your answer. (10 marks) (CLO3:PL012:C3)
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