10. Nizwa Corporation, an Omani affiliate of a major U.S.- based hotel chain, starts the calendar year with 50 million Omani Riyals (OMR) cash equity investment. It immediately acquires a refurbished hotel in Al Jabel Akhdar for OMR 45 million. Owing to a favorable tourist season, Nizwa Corporation's rental revenues were OMR 7.2 million for the year. Operating expenses of OMR 4.32 million together with rental revenues were incurred uniformly throughout the year. The building, comprising 80 percent of the original purchase price (balance attributed to land), has an estimated useful life of 20 years and is being depreciated in straight-line fashion. In addition to the information provided there, assume that Nizwa's construction cost index increased by 80 percent during the year, while the price of vacant land adjacent to Nizwa Corporation's hotel increased in value by 90 percent. Required: a. Prepare financial statements for Nizwa Corporation's first year of operations in terms of the historical-cost model and the historical-cost constant dollar model. [6 Marks] b. Compare and evaluate the information content of rate- of-return statistics computed using each of these models. (2 marks) 11. Answer the followings: a. Why an IFRS for SMEs is needed? (2 marks) b. why might a company be interested in investing in an operation in a foreign country (foreign direct investment)? (6 marks)