Question 2: The Oman National Grid Company ventures to a new project in the southern part of the Sultanate which is a kilometer, 132 kilovolts transmission lines. The company has to choose between an Overhead transmission and Underground transmission system. Table Q2 shows the initial investment for each type, the expected re during its lifetime which includes the cost savings incurred by underground transmission system over the ow transmission system. The company has estimated a salvage value for each type of transmission to be 5% of investment. As a company policy the minimum attractive rate of return MARR is 8% per year. Determine wh two alternatives is acceptable to the company using the following methods Simple payback period; (i) Benefit cost ratio: (in) Net present value NPV: (iii) Internal rate of return IRR. E229 Items Table Q2 Overhead Transmission System 8.710 Underground System 11,822 954 1275 Initial Investment (million OMR) Annual revenue + cost savings million OMR) Annual Operating & Maintenance O&M Cost Depreciation taxes million OMR Life expectancy, (years)