The exit price of an asset is RO 8,000 and the cost of disposal of the asset is RO 1000. The asset is estimated to yield a future cash flow of RO 2000 per annum for the next five years. The Net realizable value of the asset under current cost accounting is

a.

RO 7,000

b.

RO 11,000

c.

RO 11,000

d.

RO 10,000

Sun Shine corporations has a capital of RO 200,000 and the net profit of the year is RO 20,000. The Return on Investment of the similar company in the market is 12.5%. If the company appoints Mr. Hafedh as a production head, it is expected that the profits will increase by RO 3000 over and above the target profit. The maximum bid price for Mr. Hafedh and the maximum salary that could be offered to him is:

a.

RO 80,000 and RO 8000

b.

RO 88,000 and RO 11,000

c.

RO 64,000 and RO 8,000

d.

None of the options are correct

Nizwa Food company has 15 skilled employees and 10 unskilled employees. The average annual earnings of the employee till the age of retirement is RO 20,000 for the skilled employees and RO 15,000 for unskilled employees. The discount rate applicable for this company is 15%. The age of retirement for skilled and unskilled employees is 65 years. The average current age is of skilled employees is 62 years and unskilled employees is 61 years. The value of skilled and unskilled human resource of company according to Lev and Schwartz model is (The discount rate at 15% for four years is 0.869, 0.756, 0.657, 0.571)

a.

RO 529,000 and RO 452,200

b.

RO 684600 and RO 329,400

c.

None of the options are right

d.

RO 649,200 and RO 452,900