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Example 16.1: Consider the following cash flows. Year Investment A Investment B 0 --20 -15 1 12 Jolo 2 10 3 5 5 4 3

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Example 16.1: Consider the following cash flows. Year Investment A Investment B 0 --20 -15 1 12 Jolo 2 10 3 5 5 4 3 5 5 0 5 (i) Use the payback method to determine which one of A and B is the better investment opportunity. Select one: a. A b. B Refer to Example 16.1 above. (ii) Find the accounting rate of return (ARR) for Investment A. Select one: a. 60% b. 33% @ c. 25% d. 30% e. 45%

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