Deadline for Submission (Tuesday 30-11-2021)

Question 1 (5 marks): Assume you are the finance manager of Almanor Company, and the company is considering investing in one of the three projects. The life for both the Projects X, M and Project Y is 5 years. Project X costs OMR. 20500, Project M costs OMR. 20500 and Project Y costs OMR.20500. The discount rate/cost of capital is 2.15%.

Required: Use the following techniques to help company to decide which Machine is better and justify why?

a) Payback period

b) Discount payback period

c) Net Present Value

d) Present value index -Profitability index.

Year	Project X	Project M	Project Y
1	7865	3748	8752
2	4567	7609	8393
3	9676	4628	4508
4	7292	8905	7836
5	9900	9904	8287

Question 2 (5 marks): The company capital structure consists of debt 230000 at 6.45%, preferred stock 260000 at 12.40% and common stock 170000 at 11.33%, calculate and define the companys weighted average cost of capital