Appraisal techniques: ARR & IRR

The costs associated with each project are as follows: Project A () Project B () Project C () Project D () 750,000 750,000 390,000 570,000 Initial Cost Expected Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 30,000 85,000 155,000 2150,000 250,000 4.5 150,000 275,000 300,000 Rate percent 5.0 75,000 170,000 Table of Discount Factors Year 5.5 1 0.9569378 0.9523810 0.9478673 0.9433962 2 0.9157300 0.9070295 0.8984524 0.8899964 3 0.8762966 0.8638376 0.8516137 0.8396193 4 0.8385613 0.8227025 0.8072167 0.7920937 0.8024510 0.7835262 0.7651344 0.7472582 5 35,000 50,000 180,000 195,000 20,000 50,000 10,000 120,000 160,000 200,000 6.0