Question 3 The Muscat Electric Company ventures to a new project in the eastern part of the capital city which is a 200-kilometer, 300 kV transmission lines. The company has to choose between which includes the cost savings incurred by underground transmission system over the overhead transmission system. The company has estimated a salvage value for each type of transmission to be 5% of the initial investment. As a company cost of capital is 8% per year. Using the following techniques for capilal investment appraisal, perform the following: Simple Payback Period (6) Average Rate of Return 8 (m) Benefit Cost Ratio; 17 marksi (iv) Determine which of the alterative is acceptable to the company based on the above results. 17 marks) [3 marks) [Total 25 marks] Table Q3: Rovencio & Expansos in Million OMR Overhead Underground Items Cable Transmission Cable Transmission System Syslom Initial Investment 9,800 12,283 (million OMR) 821 1023 Annual Revenue cost savings (million OMR) Increases by 2% per year First 10 years: 209 Succeeding years: 3% increase per year Increases by 2% per your First 10 yoars: 162 Succeeding yours: 1.5% Increase por year Annual Operating & Maintenance O&M Cost (million OMR) Annual taxes (million OMR) 10% of (Annual Revenue + cost savings) 10% of (Annual Revenue + cost savings) 40 Life expectancy, years 50