Q4

Al Batinah Co. is considering purchasing a new building for its administration. The new building will require an initial investment of OMR 650,000. The after-tax cash inflows are: OMR 300,000 (year 1), OMR 450,000 (year 2), OMR 500,000 (year 3), and OMR 575,000 (year 4). Additional info: a. Net Present Value (NPV) - assume that the required rate of return is 15%. b. Payback Period (PBP) - assume that management expects to recover its initial investment in 3 years. Based on the Payback Period (PBP) this project should be: Select one: O a. Re-calculated O b. None of the answers are correct O c. Rejected O d. Ignored e. Accepted