Project S has a cost of OMR 15,000 and is expected to produce benefits The Project S has a cost of OMR 15,000, is expected cash flows of OMR 4,000 per year for 6 years. Whereas project L costs OMR 20,000, is expected cash flows of OMR 7,500 per year for 6 years.

Referring to the data below, Calculate the projects’ NPVs, and determine the project that has the greatest net worth.

Debt Financing	25% could be paying interest rates of 10%
Equity Issuing	75% a cost of 10%
Income Tax Rate	40%

Answer rating: 100% (QA)

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