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Mr. Ali is the CEO of Fiditzi Construction company and they have an allotted budget for project which is 1,000,000 R.O. Projects in different places

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Mr. Ali is the CEO of Fiditzi Construction company and they have an allotted budget for project which is 1,000,000 R.O. Projects in different places in Oman are projected to show the following cash inflows per year Year Project in Muscat Project in Ibri Project in Salalah Project in Shinas Near 1 200,000 400,000 150,000 480,000 Year 2 400,000 300,000 200,000 570,000 Year 3 500,000 600,000 100,000 600,000 Near 4 400,000 500,000 400,000 200,000 Year 5 300,000 300,000 500,000 100,000 Assume that Mr. Ali will apply loan to the bank to finance the 1,000,000 investment fund and New Bank offered a rate of 6% interest rate payable in 5 years, while Old Bank offered 6,5% payable in 9 years. Mr. Ali wanted to know the Net present value of cash inflows of the Project in Muscat at 6% discount rate with discount factors for five years are 0.943, 0.890, 0.839, 0.7921 and 0.7473 respectively O a500000 O b. None of the given options Oc505000 O d. 1505000 Based on the calculated payback period which statement is correct between project in Muscat and in Salalah? O a Muscat project has longer payback period so it should not be selected b. The payback period is higher in Salalah, so it should be selected. O c The payback period is lower in Muscat so it should be selected. a. Salalah has shorter payback period so it should be selected Mr. All wanted to know which project is to be selected on the basis net present value of cash inflows in comparison to Muscat and Shinas at 6% discount rate with discount factors for five years are 0.943, 0.890 0.839,07921 and 0.7473 respectively a. Project in Shinas Ob. Both project of Muscat and Shinas c. Project in Muscat Od. None of the given options If Mr. All would choose Old Bank, which is better for him? O a Compound Interest is better for him since he will earn more. O b. None of the given options O c In compound interest, it will cost him less interest expense Od. In simple interest it will cost him less interest expense

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