As a financial manager of Dublin Enterprises, you are required to analyse two proposed capital investments, Projects ABC and Project XYZ. Each has a cost of R400 000, and the cost of capital for each project is 15%. Depreciation is calculated on the straight-line method. The projects expected profit are as follows: P R OJECT ABC P R OJECT XYZ Year 1 R 8 0 000 R 3 0 000 2 R 1 0 000 R 3 0 000 3 R 1 0 000 R 3 0 000 4 ( R 30 000) R 3 0 000

1.2 Calculate the NPV for each project 1.3 Which project or projects should be accepted if they are independent? 1.4 Calculate the ARR for project XYZ