Question: Shams company is considering two projects. Each requires an initial investment of OMR 100,000. The company cost of capital is 14%. The cash inflows associated

  1. Shams company is considering two projects. Each requires an initial investment of OMR 100,000. The company cost of capital is 14%. The cash inflows associated with each project are as follows:

Cash inflows

Year

Project A

Project B

1

30,000

60,000

2

25,000

50,000

3

30,000

20,000

4

40,000

10,000

5

20,000

20,000
    1. Calculate the NPV for each project. (2 marks)
    2. Which project you would recommend to the management. Explain why. (1 marks)
  2. Write a short note about one of the current trends and issues in finance. (2 marks)

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