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Task 1 (Capital Investment Appraisal) Magna Investments LLC, an investment company based in Muscat, is planning to invest capital on a new venture. The company
Task 1 (Capital Investment Appraisal) Magna Investments LLC, an investment company based in Muscat, is planning to invest capital on a new venture. The company is considering three mutually exclusive projects A, B, and C for investment, whose annual cash flows are given in Table Q1. a) Determine the Pay Back Periods (PBP) of the three projects. (3 Marks) b) Determine the Average Rate of Return (ARR) of the three projects. (3 Marks) c) If the Cost of Capital for funding the projects is 7%, calculate the following: (i) Discounted Pay Back Periods (DPBP) of the three projects. (6 Marks) (ii) Net Present Value (NPV) of the three projects. (6 Marks) d) If the Minimum Acceptable Rate of Retum (MARR) set by the company is 5%, evaluate the Internal Rates of Return (IRR) of the three projects and suggest which of the three projects could be accepted
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