currently looking at two countries - Sri Lanka and Malaysia. The company's plan to issue bonds...

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currently looking at two countries - Sri Lanka and Malaysia.The company's plan to issue bonds and new ordinary shares to raisemoney for the investment. This gives rise to a 15% weighted averagecost of capital.
The following data are estimates for the project in thesecountries.
A preliminary study by the company's investment team indicatesthat tea contributes significantly to Sri Lankan's economy,primarily in the country's export and employment. Approximately, 5%of Sri Lankans work at tea plantation (BBC, 2018). However, reportson unfavorable working conditions and recent development in thecountry raises security concerns.
Tea plantation is only a small portion of agriculture industryin Malaysia. Hence, there are not as many Malaysians are employedby this industry relative to its populations and the Sri Lanka. Theinvestment team at Tea Life also finds that that Malaysiaintroduced minimum wage in 2016 and was revised in 2019 fromapprox. A$300 to A$400 per month.

Required
Evaluate the proposals. Your answer should include thefinancial and non-financial factors.

a contributes significantly to Sri Lankan's economy, primarilyin the country's export and employment. Approximately, 5% of SriLankans work at tea plantation (BBC, 2018). However, reports onunfavorable working conditions and recent development in thecountry raises security concerns.
Tea plantation is only a small portion of agriculture industryin Malaysia. Hence, there are not as many Malaysians are employedby this industry relative to its populations and the Sri Lanka. Theinvestment team at Tea Life also finds that that Malaysiaintroduced minimum wage in 2016 and was revised in 2019 fromapprox. A$300 to A$400 per month.
Required
Evaluate the proposals. Your answer should include thefinancial and non-financial factors.

Sri Lanka
Malaysia
Initial investment ($’000,000)
250
500
Land lease (years)
10
15
Payback period (years)
7
11
IRR (%)
15%
16.25%

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3.9 Ratings (750 Votes)

Sri Lanka Malaysia Initial investment 000000 250 500 Land lease years 10 15 Payback period years 7 11 IRR 15 1625 WACC 15 15 Evaluation of the two proposals Financial factors amt of Investment is high for Malaysia In case of SriLanka the initial investment is recovered by 7 years but the same takes 10 yrs For Malaysia See Answer

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currently looking at two countries - Sri Lanka and Malaysia.The company's plan to issue bonds and new ordinary shares to raisemoney for the investment. This gives rise to a 15% weighted averagecost of capital.The following data are estimates for the project in thesecountries.A preliminary study by the company's investment team indicatesthat tea contributes significantly to Sri Lankan's economy,primarily in the country's export and employment. Approximately, 5%of Sri Lankans work at tea plantation (BBC, 2018). However, reportson unfavorable working conditions and recent development in thecountry raises security concerns.Tea plantation is only a small portion of agriculture industryin Malaysia. Hence, there are not as many Malaysians are employedby this industry relative to its populations and the Sri Lanka. Theinvestment team at Tea Life also finds that that Malaysiaintroduced minimum wage in 2016 and was revised in 2019 fromapprox. A$300 to A$400 per month.RequiredEvaluate the proposals. Your answer should include thefinancial and non-financial factors.a contributes significantly to Sri Lankan's economy, primarilyin the country's export and employment. Approximately, 5% of SriLankans work at tea plantation (BBC, 2018). However, reports onunfavorable working conditions and recent development in thecountry raises security concerns.Tea plantation is only a small portion of agriculture industryin Malaysia. Hence, there are not as many Malaysians are employedby this industry relative to its populations and the Sri Lanka. Theinvestment team at Tea Life also finds that that Malaysiaintroduced minimum wage in 2016 and was revised in 2019 fromapprox. A$300 to A$400 per month.RequiredEvaluate the proposals. Your answer should include thefinancial and non-financial factors.Sri LankaMalaysiaInitial investment ($’000,000)250500Land lease (years)1015Payback period (years)711IRR (%)15%16.25%