1. (5 points) Provide an introduction into the case with a problem statement. 2.

1. (5 points) Provide an introduction into the case with a problem statement.
2. (10 points) What is the central issue facing Anwal Gas Traders?
3. (35 points) Perform the capital budgeting for the project and calculate the NPV, IRR,
payback period and profitability index.
4. (20 points) A consultant suggests that the government may increase the sector′s tax
from 29 percent to 35%, resulting in a price increase of only 3% annually. What changes
in the capital budgeting process should be made? How will this tax and price increase
affect the company′s decision?
5. (20 points) The finance department recommends a local bank interest rate of 19
percent* and a WACC of 15%. Conduct capital budgeting techniques for the given
scenario.
*You may assume that this is the effective cost of debt (rd) paid by the firm and used in the
new WACC. Should you be critical to the WACC of 15% proposed by the finance department?
6. (10 points) Summarize the findings and answer the problem statement in the conclusion.