Pangan SECTION 1 (10 X 1 MARK = 10 MARKS) 1. Omar is the owner of a private school is considering the purchase of six school buses to transport students to and from school events The life of each bus is estimated to be 3 years, after which time the vehicles would have to be scrapped with no salvage value School management doesn't have money recently, it could go to finance through bank totally or partially. The school's revenue mainly comes from tuition fees. According to the previous year's school made profit which encourage management to expand the revenue by purchasing buses Suppose that Mr. Omar has hired you as a consultant to help them make the decision. Please draft an official memo to them with your analysis and recommendations. Your submission should cover the following questions: 1. Briefly, summarize the key facts of the case and identify the problem being faced by Mr. Omar. In other words, what is the decision that they need to make? 2. What are some approaches that can be used to solve this problem? What are some various criteria or metrics that can be used to help make this decision? 3. What are the important factors the financial manager should consider before making decision? Explain? 4. If the figures are not certain, how would you deal with this situation glish (US e rch Classication of investment projects Type o Deco T.uplacement decision Replacement of wom-cut or god of equipment antigasse is replaced by one of the type or with tre of machine with the Gentional use Purposes a lower the costs of labor mauris, and the Inputs such as electricity ( broduce new technology c) To increase instaled capacity improve speed of SERVIS Classification of investment projects Classification of investment projects Diversification decision Invariably, a detailed analysis required and the final decision is generally at the very by the board of directors part 2. Expansion decision Decision regarding whether the firm should increase it production capacity and operations by adding new products, additional machines, and so on. . These decisions are more complex because they requirt an explicit forecast of growth in demand The govno-go decision is generally made at a higher level within the firm