(D) CAPITAL BUDGETING (12 marks) In view of the Covid-19 pandemic, your company decides to evaluate and invest 2% of the total funds proceeds raised in Part (C) above into a new Business Z that...

(D) CAPITAL BUDGETING (12 marks) In view of the Covid-19 pandemic, your company decides to evaluate and invest 2% of the total funds proceeds raised in Part (C) above into a new Business Z that specialises in medical supplies, with details as follows: Business Z is estimated to have a useful life of 5 years with 10% terminal value. You are to assume the following financial information of Business Z, based on your project groupings:Year 1 Revenue: 200,000Assumption: Sales will increase by 12% each year from Years 2 to 5. Annual operating expense is estimated to be 30% of sales. Tax rate is 17%.Your company expects all investments to pay back within 3 years and have positive net present value. Assume your company’s cost of capital is at 6% p.a. Required (Round your answers to the nearest whole number): (i) Compute the net yearly cash flows from Year 0 to Year 5. (ii) Compute payback period for the planned investment in Business Z. (iii) Compute net present value (NPV) for the planned investment in Business Z. (iv) Discuss with reasons whether your group would recommend your company to invest in the Business Z. (v) Recommend other qualitative factors for your company to consider before undertaking investment into capital budgeting projects