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a. Al Manar Company is planning to invest in a project costing 100,000 OMR which is expected to generate future net cash flows with a
a. Al Manar Company is planning to invest in a project costing 100,000 OMR which is expected to generate future net cash flows with a present value of 120,000OMR. Calculate the profitability index. b. What is your advice to the company? Question 6 Bank Ibra is planning to invest RO 90,000 (initial investment) to open a new branch in Al Yahmadi. The project will bring an annual cash inflow for four years (the life of the project) as shown in the below table: The Bank requires 15% annual interest rate for the investment. Required: 1. Calculate the Profitability Index (PI) for this investment (project) 2. What is your advice to the investor (Bank Ibra)
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