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: PROJECT APPRISAL ASSIGNMENT.... > Inco 1. Discuss and explain what are the different methods as financial Manager could use for evaluating projects? Why using

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: PROJECT APPRISAL ASSIGNMENT.... > Inco 1. Discuss and explain what are the different methods as financial Manager could use for evaluating projects? Why using one method than others? 2.Al Shroud Company is considering machinery which will require the purchase of a machine for OMR 500.000 at time zero. The scrap value at the end of its useful life is RO 50,000. Corporation tax, at a Tute of 10% of taxable income, is payable. Cash flows after tax (PAT) are forecast to be: Time (year) 1 2 3 Cash flows 300,000 250,000 400,000 200,000 However, these are expected to rise by 5.0% pa because of inflation. The firm's cost of capital is 12% Evaluate and find the NPV by: (a)Discounting money cash flows. (b)Discounting real cash flows 3. Sun Company has its profit after taxes for new investment proposal for four years as shown below. Assume that the initial investment is OMR 50,000 Salvage value is OMR 10.000 ptails Reve 340 Code E420004,630 Cros 300002.00034, 2006 DO TRASES Deputation | Lao 6400 INTE 5.000 30000 KSS Inst 2.000.000 4.700.00 ERT 3.000 4.100 950 2.500 Tesor 1.500 2.250 2.75 1.299 Naturing TT 1.500 2.00 2.78 1790 According to above information, evaluate new investment proposal and provide your analyses on acceptance decision by using below mentioned methods. a) Accounting Rate of Return (ARR), if desired rate of retum 12% b) Discounted Payback Period, if the pre-determined payback period 3 years. 4.A new project is evaluated at present that involves purchasing a new assembly machine for RO 25,000. It will cost RO 2,000 to install the machinery. By making the investment, the annual operating costs will be reduced by RO 7.000 and expect to save RO 500 a year in maintenance The new machine will require RO 750 cach year for technical support. The machinery will be subject to depreciation over 5 years under the straight-line method of depreciation with an expected salvage value of RO 5.000. The effective tax rate is 35% Calculate Relevant Cash Flows for Capital Project

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