Question
5.1 Calculate the Payback Period of Project A (expressed in years, months and days). (3 marks) 5.2 Calculate the Accounting Rate of Return on average
5.1 Calculate the Payback Period of Project A (expressed in years, months and days). (3 marks)
5.2 Calculate the Accounting Rate of Return on average investment of Project A (expressed to two decimal places). (4 marks)
5.3 Calculate the Benefit Cost Ratio of both projects (expressed to two decimal places). (7 marks)
5.4 Refer to yours answers in question 5.3. Which project should be chosen? Why? (1 mark)
5.5 Calculate the Internal Rate of Return of Project B (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation.
The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be chosen.
The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be chosen. The company estimates that its cost of capital is 12%. Ignore taxes
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