MACHINE A$$ Initial Investment$$Tsh$.500,000$

MACHINE B intial investment $$Tsh$.600,000$

Exceptional Net Cash inflow$$

Year Machine A Machine B

$1150,000200,000$

$2150,000100,000$

$3150,000200,000$

$4150,000100,000$

$5150,000200,000$

$$ The firm is in the $40$ percent tax shield

$$ The firm depreciates its assets using straight line method, with ten percent residual values for any activity taken by the organization.

$$ The cost of capital of the firm is $12$ percent

$($i$).$ Calculate the Accounting Rate of return for each project. Assuming you were the financial manager which project to invest. Why?

$($ii$).$ Calculate the payback period of each project. Which project to invest? Why?

$($iii$).$ Calculate the Profitability Index of each project. Which project to invest? Why?

$($iv$).$ Calculate the internal rate of return for each project. Wh