6.19 Calculation of payback, ARR and NPV

The following data are supplied relating to two investment projects, only one of which may be selected:

Project A (1) Project B (1) Initial capital expenditure 50,000 50,000 Profit (loss) year 1 25,000 10,000 20,000 10,000 3 15,000 14,000 10,000 26,000 Estimated resale of value of year 4 10,000 10,000