Question
. Assume that there is a proposal to start new energy plant in Duqm. The project requires an investment of RO 160,000. The following are
. Assume that there is a proposal to start new energy plant in Duqm. The project requires an investment of RO 160,000. The following are projected net annual cash inflows of the project.
| Year | 2021 | 2022 | 2023 | 2024 | 2025 |
| Net Cash Flow (RO) | 30,000 | 32,000 | 32,000 | 40,000 | 34,000 |
Required:
i. Calculate the Net Present Value of the project using an estimated/assumed expected rate of return. Show your workings.
ii. Make a recommendation to accept or reject the project.
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond, Arne Strom
4th Edition
0273760688, 9780273760689
