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complete numer 5 year T 230000 G 75000 NewWorld SAOG is planning to replace its old machine with a new model machine. The company can

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complete numer 5 year
T 230000
G 75000
NewWorld SAOG is planning to replace its old machine with a new model machine. The company can choose one from the two models available in the market( Model T or Model G) with an equal investment of OMR 510000. The additional cost of utilities of Model T and Model G are OMR120,000 and OMR 160000 respectively. The old machine can be sold for OMR 95000. The earnings from Model T and Model G are expected to be: Year 1 2 3 4 Model T 200,000 Model G 170,000 140,000 190,000 190,000 90,000 190,000 110,000 The cost of capital is 9%. At the end of fifth year the machine T and Machine G can be sold for OMR 25,000 and OMR 35,000 respectively. You are required to suggest the best option from the options below Only Model G has an positive NPV of OMR 213370 therefore Model G can be chosen Only Model T has an positive NPV of OMR 213370 therefore Model T can be chosen Both Model G and Model T can be selected Since Model T and Model G have negative NPV, both machines will be rejected

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