and classify the project into Replacement decision, lecision, Diversification decision, Safety and/or tal projects, Independent Projects, Mutually-exclusive Dependent Projects/Contingent Projects: ntion the reasons for the classification.
and classify the project into Replacement decision, lecision, Diversification decision, Safety and/or tal projects, Independent Projects, Mutually-exclusive Dependent Projects/Contingent Projects: ntion the reasons for the classification.
Chapter14: Multinational Capital Budgeting
Section: Chapter Questions
Problem 1ST
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Question
![Question :
A) Identify and classify the project into Replacement decision,
Expansion decision, Diversification decision, Safety and/or
environmental projects, Independent Projects, Mutually-exclusive
project and Dependent Projects/Contingent Projects:
B) Also mention the reasons for the classification.
1. Oman Insurance Company started their new branch in Salalah.
2. Badar Al Sama Hospital entered into a contract with health
providers in UAE to open their clinics in UAE.
3. Intertek had two projects, that require initial outlay of RO250,000.
Board of Directors decided to accept both projects, as the company
had sufficient funds to invest in both projects.
4. Marine Engineering has a budget of $50,000 for expansion
projects. If available Projects A and B each cost $40,000 and
Project C costs only $40,000.
5. Slice Traders, specialized in selling carbonated juices intends to
start their manufacturing units, producing potato chips in Oman.
6. A leading bank in the region intends to add mutual fund and
merchant banking services to its customers.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F08594daa-e2c4-44bd-bfad-284cc92ed125%2F4f3497a8-7c22-4dac-b743-4e1c43ebf6c0%2Fxufx8nb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question :
A) Identify and classify the project into Replacement decision,
Expansion decision, Diversification decision, Safety and/or
environmental projects, Independent Projects, Mutually-exclusive
project and Dependent Projects/Contingent Projects:
B) Also mention the reasons for the classification.
1. Oman Insurance Company started their new branch in Salalah.
2. Badar Al Sama Hospital entered into a contract with health
providers in UAE to open their clinics in UAE.
3. Intertek had two projects, that require initial outlay of RO250,000.
Board of Directors decided to accept both projects, as the company
had sufficient funds to invest in both projects.
4. Marine Engineering has a budget of $50,000 for expansion
projects. If available Projects A and B each cost $40,000 and
Project C costs only $40,000.
5. Slice Traders, specialized in selling carbonated juices intends to
start their manufacturing units, producing potato chips in Oman.
6. A leading bank in the region intends to add mutual fund and
merchant banking services to its customers.
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