Assignment II 01: XOM is the biggest oil company in the world. XOM needs a drilling Machine. The drilling machine cost $15m. The company intend to use the machine for 10 years. If the company choose to buy the machine, then they have to pay $25000 yearly -as maintenance cost for the first 5 years, then this cost would increase by 20% yearly start from year 6 until the year 10. Leasing: The leasing company would lease the company for 2m yearly start from next year. XOM has to pay only 25% of the maintenance cost The bank would lend XOM at 12% Calculate NP for each option. And decide which is better for the company Q2: Ahmad want to buy a taxi. The taxi cost $50,000. The yearly CF would be $10000, however Ahmad has to pay license fees $200 and maintainace cost $250 yearly. Ahmad would be able to sell the car after 5 years for $15000. Ahmad intend to borrow the whole amount from the Arab Bank at 12% 1. Calculate IRR for this project 2. Do you think Ahmad should take this project? Explain