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2. man Company is considering the investment on a project with initial investment of OMR 5,000,000. The project has a life of 4 years. Information

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2. man Company is considering the investment on a project with initial investment of OMR 5,000,000. The project has a life of 4 years. Information relating to the future cash flows of this project are as follows: Year Sales volume Selling price per Variable cost per Fixed cost (units) unit unit 1 15.000 450 260 750,000 2 15,000 475 280 750,000 3 10,000 500 295 750,000 4 10,000 570 320 750,000 Oman company has a nominal cost of capital of 13%. Required: Measure the sensitivity of the project to changes in variables and give your recommendations. (4 marks)

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