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Note I need all steps And recommendations and analysis Summary Please I need Solutions by computer typing Best regard Mmm Question 2: The Oman National
Note I need all steps And recommendations and analysis Summary
Please I need Solutions by computer typing
Best regard Mmm
Question 2: The Oman National Grid Company ventures to a new project in the southern part of the Sultanate which is a 250 kilometer, 132 kilovolts transmission lines. The company has to choose between an Overhead transmission system and Underground transmission system. Table Q2 shows the initial investment for each type, the expected revenues during its lifetime which includes the cost savings incurred by underground transmission system over the overhead transmission system. The company has estimated a salvage value for each type of transmission to be 5% of the initial investment. As a company policy the minimum attractive rate of retum MARR is 8% per year. Determine which of the two alternatives is acceptable to the company using the following methods: 6) Simple payback period (I) Benefit cost ratio: (ii) Net present value NPV; (1) Internal rate of return IRR. Items Table Q2 Overhead Transmission System 8,166 Underground System Initial Investment (million OMR) 11,857 Annual revenue + cost savings 1023 1246 253 (million OMR) Annual Operating & Maintenance O&M Cost/Depreciation/ taxes (million OMR) Life expectancy, n (years) 40 [Total 25 marks]Step by Step Solution
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