PVierast In. OX Stay Home Done ASSIGNMENT CAPITAL BUDG... 1. ABC Company is considering following two mutually exclusive projects in Oman. Each requires an initial investment of OMR 80,000. The after tax cash inflows associated with cach project is as follows in OMR (3 marks) Year Cashews Cashflows (Project Y) (Project ) (Initial Investment) 0.000 0.000 20.000 40,000 10.000 30.000 20,000 15.000 2.500 20.000 a. Calculate the payback period for Project X and Project Y Which project should the company invest in and why? 2. The cash flows (CF) of a project which you are considering to invest are given below. If the cost of capital of the project is 8%, would you accept the project based on Net Present Value Method Show the cakulation to support your decision. (4 marks) Year 0 Year Year 2 Year 3 Year 4 CFS -6000 2000 3000 3000 1000 3. Compare and contrast Payback Period Method and Net Present Value Method. Which one is a better approach for evaluating Capital Expenditure Projects