The initial investment of a project is OMR 30,000. The profit after interest and tax (Cash inflows) for Year 1 is OMR 20,000 and for Year 2 is OMR 26,000. The scrap value is OMR 3,000 and the discount rate is 10%. (The present value of OMR 1 at 10% discount factor for year 1 is 0.909 and Year 2 is 0.826). In this case, the Net present Value (NPV) of the project is: a. OMR 9,656 b. None of these c. OMR 16,000 d. OMR 12,134

The initial investment of a project is OMR 30,000. The profit after interest and tax (Cash inflows) for Year 1 is OMR 20,000 and for Year 2 is OMR 26,000. The scrap value is OMR 3,000 and the discount rate is 10%. (The present value of OMR 1 at 10% discount factor for year 1 is 0.909 and Year 2 is 0.826). In this case, the Net present Value (NPV) of the project is: a. OMR 9,656 b. None of these c. OMR 16,000 d. OMR 12,134

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

The initial investment of a project is
OMR 30,000. The profit after interest
and tax (Cash inflows) for Year 1 is
OMR 20,000 and for Year 2 is OMR
26,000. The scrap value is OMR
3,000 and the discount rate is 10%.
(The present value of OMR 1 at 10%
discount factor for year 1 is 0.909
and Year 2 is 0.826). In this case, the
Net present Value (NPV) of the
project is:
a. OMR 9,656
b. None of these
c. OMR 16,000
d. OMR 12,134

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