18-A project cost is RO. 30,000 and the expected cash inflows every year is RO. 7000. The total life of the project is 6 years.

The predetermined payback period is 5 Years

What is your recommendation as per the Payback Period Technique?

Reject the Project

More Information is needed to take the decision

Project can be Accepted or Rejected

Accept the Project

NewWorld SAOG is planning to replace its old machine with a new model machine. The company can choose one from the two models available in the market( Model T or Model G) with an equal investment of OMR 510000. The additional cost of utilities of Model T and Model Gare OMR120,000 and OMR160000 respectively. The old machine can be sold for OMR 95000. The earnings from Model T and Model G are expected to be : Year 1 2 3 4 5 Model T 200,000 Model G 170,000 140,000 190,000 190,000 90,000 190,000 230,000 110,000 75,000 The cost of capital is 9%. At the end of fifth year the machine T and Machine G can be sold for OMR 25,000 and OMR 35,000 respectively. You are required to suggest the best option from the options below Both Model G and Model T can be selected Since Model T and Model G have negative NPV, both machines will be rejected Only Model G has an positive NPV of OMR 213370 therefore Model G can be chosen o Only Model T has an positive NPV of OMR 213370 therefore Model T can be chosen