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4. SALALAH LLC has project proposal for the production of Mats. The following scenarios are considered. Use the given information to calculate the NPV of

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4. SALALAH LLC has project proposal for the production of Mats. The following scenarios are considered. Use the given information to calculate the NPV of two scenarios. (2.5+2.5 = 5 marks) Worst-Case Scenario Best-Case Scenario Sales Volume 800,000 units Sales Volume 1,300,000 units Sales Price 900bz Sales Price 1200bz Initial investment OMR 860,000 Initial investment OMR 780,000 Project life 3 years Project life 4 years Discount rate 17% Discount rate 14% Labour Cost OMR 176,000 Labour Cost OMR 247,000 Materials Cost OMR 360,000 Materials Cost OMR 494,000 Overhead Cost OMR 88,000/Overhead Cost OMR 117,000 The initial investment consists of investment in machines, which will have a zero (0) scrap value at the end of the four- year life of the project

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