Question # 3: Read the case carefully and answer the questions that follow The government of Oman has decided to construct a water Dam in Hay- A-Turath, Nizwa. The construction of the dam can be finished in 2 years and the expected life of the dam is estimated to be 5 years after its completion. The following is the cost and revenue schedule of the project Year Cost: Construction cost Annual maintenance cost Relocation cost Destruction of crops Revenue: Addition harvest Ticket revenue from park Requirements: 1 2 3 4 5 6 7 10,000 20,000 2,000 3,000 1,000 1,000 1,000 1,000 1,000 (a) Calculate the 10,000 10,000 10,000 10,000 10,000 500 500 500 500 500 net cash flow of the project. (b) If the social discounting rate is 6%, calculate the net present value (NPV) (c) Based on NPV calculation, will you accept the project?

Question # 3: Read the case carefully and answer the questions that follow The government of Oman has decided to construct a water Dam in Hay- A-Turath, Nizwa. The construction of the dam can be finished in 2 years and the expected life of the dam is estimated to be 5 years after its completion. The following is the cost and revenue schedule of the project Year Cost: Construction cost Annual maintenance cost Relocation cost Destruction of crops Revenue: Addition harvest Ticket revenue from park Requirements: 1 2 3 4 5 6 7 10,000 20,000 2,000 3,000 1,000 1,000 1,000 1,000 1,000 (a) Calculate the 10,000 10,000 10,000 10,000 10,000 500 500 500 500 500 net cash flow of the project. (b) If the social discounting rate is 6%, calculate the net present value (NPV) (c) Based on NPV calculation, will you accept the project?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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