FOUR A firm has to choose between two possible projects and the details of each project are as below Capital Cost KES Project A 30,000 Project B 50,000 Project C 45,000 Net cash inflow Project A Project B Project C KES Year 1 7,500 10,000 5,000 Year 2 12,500 20,000 7,500 Year 3 12,500 30,000 25,000 Year 4 10,000 30,000 30,000 Year 5 7,500 15,000 20,000 Required (a) Advise on the best two options I the prevailing cost of interest is 12% using. i. Accounting Rate of Return (4 marks) ii. Net present Value (8 marks) iii. Discounted payback period (4 marks) (b) Pick one in (a) above and give TWO merits and demerits. (4 marks)