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Al-Amal Company is planning to replace its old equipment and obtained two quotations for Model A and Model B. Model A has an initial cost

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Al-Amal Company is planning to replace its old equipment and obtained two quotations for Model A and Model B. Model A has an initial cost of OMR 150,000 with additional power cost of OMR 30,000. Model A will have a salvage value of OMR 25,000 at the end of its four-years useful life. Model B has an initial cost of OMR 140,000 with additional power cost of OMR 20,000. Model B will have a salvage value of OMR 35,000 at the end of its four-years useful life. The old equipment can be sold for OMR 30,000. Al-Amal Company has 9% cost of capital The expected earnings from Mosel A and Model B are as follow: Year 1 2 4 Model A 45,000 40,000 35,000 30,000 50,000 45,000 30,000 Model B 25,000 1. Calculate the net cash outflows of Model A . 2. Calculate the net cash outflows of Model B 3. What is NPV of Model A? 4. What is NPV of Model B? 3. What is NPV of Model A? 4. What is NPV of Model B? : 5. Which model you suggest Al-Amal Co. to buy

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