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Oman Company is considering the investment on a project with initial investment of OMR 5,000,000. The project has a life of 4 years. Information

Oman Company is considering the investment on a project with initial investment of OMR 5,000,000. The project has a life of 4 years. Information relating to the future cash flows of this project are as follows: Year Selling price Variable cost per unit Sales volume Fixed cost (units) per unit 15,000 450 260 750,000 15,000 475 280 750,000 10,000 500 295 750,000 10,000 570 320 750,000 Oman company has a nominal cost of capital of 13%. Required: Measure the sensitivity of the project to changes in variables and give your recommendations. (2 marks) 2. 3. 4.

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