Assume you are the finance manager of Almanor Company, and the company is considering investing in one of the three projects. The life for both the Projects X, M and Project Y is 5 years. Project X costs OMR. 20500, Project M costs OMR. 20500 and Project Y costs OMR.20500. The discount rate/cost of capital is 4.15%. Required: Use the following techniques to help company to decide which Machine is better and justify why? a) Payback period b) Discount payback period Net Present Value d) Present value index -Profitability index. Year Project X Project M 3748 Project Y 7865 2 8752 4567 7609 8393 3. 9676 4628 4. 4508 7292 8905 7836 0066 8287 Ctrl) -

Assume you are the finance manager of Almanor Company, and the company is considering investing in one of the three projects. The life for both the Projects X, M and Project Y is 5 years. Project X costs OMR. 20500, Project M costs OMR. 20500 and Project Y costs OMR.20500. The discount rate/cost of capital is 4.15%. Required: Use the following techniques to help company to decide which Machine is better and justify why? a) Payback period b) Discount payback period Net Present Value d) Present value index -Profitability index. Year Project X Project M 3748 Project Y 7865 2 8752 4567 7609 8393 3. 9676 4628 4. 4508 7292 8905 7836 0066 8287 Ctrl) -

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 11P

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