Laith Corporation is considering an investment that will cost OMR 72,000 and have an OMR 10,000 salvage value at the end of its four years useful life. The companys cost of capital is 8%. During the first 2 years, the net profit after-tax cash flows are OMR 25,000 per year and for the last two years they are OMR 20,000 per year.

1.What is the discounted payback period (to the nearest month)?

a) 3 years, 9 months

b) 3 years, 6 months

c) 2 years, 6 months

d) 2 years, 9 months

2. What is the NPV of the above investment proposal?

a) OMR 3,551

b) OMR 3,155

c) OMR 82,505

d) OMR 10,505