Question 1: Salalah Methanol company management is considering three competing investment Projects Option1: Starting a...
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Finance
Question 1:
Salalah Methanol company management is considering three competing investment Projects Option1: Starting a unit in Sohar, Option 2: Starting a unit in Musandam and Option 3: Starting a unit in Muscat The intial investment for all the projects are 15000 and the cost of capital is 5.005%.
Year
Sohar
Musandam
Muscat
1
1100
2160
3225
2
3100
3260
4250
3
3800
4360
5475
4
4600
5460
6300
5
5100
6900
7000
Use the information below and help the management in choosing the most desirable Project using
a. Payback period
b. Discounted payback
c. Net Present value
d. Profitability Index.
You have to comment and suggest to the management which project to choose and why and projects they should not choose at all at any cost.
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