Reference no: EM133205809

Dream Pictures Corporation is considering a new four-year expansion project that requires initial investment to buy an asset at a cost of RM 1800,000. Previously, the costs of operational feasibility study and market research amounting RM100,000 is already undertaken in connection with this project during the past 3 years. The relevant initial cost will be depreciated straight-line to zero over its useful life and it will be worth 12 percent of its total costs. The project is expected to generate sales of RM1.2 million in years 1 to 2 and the sales increase to RM2 million in years 3 and 4, respectively. The quantity produced are 15,000 units in year 1 and increases by 10% every year onwards. The variable cost per unit and fixed cost per month are RM30 and RM12,000, respectively. At the end of the project, the firm's net working capital will be recovered by RM 180,000. The tax rate is 28 percent. Construct the relevant cash flow of the four (4) years proposed project.