NPV,APV, WACC

8. Refer to the information below:
Company A in Malaysia Proxy in Singapore
Equity beta 1.25 1.03
Debt beta 0.01 0.02
Debt to equity ratio 150% 67%
Risk Free rate of return 2% 3%
Market risk return 7% 8%
Interest rate 3% 4%

As Company A is going to invest in a different business in Singapore, it would like to know the ungeared cost of equity of the new business in Singapore. Calculate the Singapore ungeared cost of equity.

9. The 5-year investment requires an initial cost of SGD1 billion with zero scrap value. It requires initial working capital of SGD400 million and it is expected to increase by 4% each year and will be recovered at the end of the project. The project is able to generate after-tax cash flows of SGD380 million per annum. The tax allowable depreciation is using straight line basis. 40% of the initial cost is subject to tax allowable depreciation. Tax rate is 25%. The spot exchange rate is MYR3.25: SGD1. Calculate the base case NPV in MYR by discounting SGD cash flows based on the discount factor calculated in the previous question.

10. The investment of SGD1 billion is financed by a government grant of SGD100 million, a 2% 5-year soft loan amounting to SGD400 million and the remaining of the initial cost is financed by a 6% 5-year normal loan. Calculate the APV in MYR based on the base case NPV calculated in the previous question.