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Salalah Methanol company management is considering three competing investment Projects Option1: Starting a unit...

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Finance

Salalah Methanol company management is considering three competing investment Projects

Option1: Starting a unit in Sohar,

Option 2: Starting a unit in Musandam and

Option 3: Starting a unit in Muscat

The intial investment for all the projects are 15000 and the cost of capital is 5.005%

Year

Sohar

Musandam

Muscat

1

1100

2160

3225

2

3100

3260

4250

3

3800

4360

5475

4

4600

5460

6300

5

5100

6900

7000

Use the information below and help the management in choosing the most desirable Project using

a. Payback period

b. Discounted payback

c. Net Present value

d. Profitability Index.

You have to comment and suggest to the management which project to choose and why and projects they should not choose at all at any cost

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