maining Time 1 hour, 46 minutes, 12 seconds Question Completion Status: Batelco Inc. is considering two mutually exclusive life of the the curren ject A will be 5-Year's and Projec onomic situation Batelco Inc. has neojects A and B. Each project requires an initial investment as presented in the below table. The economic be 6 years, and both projects carme risk. Batelco Inc uses a disco maxximum payback period of 4 ye and minimum return on investme prepared estimates of the annual revenues and cos asociated with each project as in the below table: of 12% After considering 18% A financial analys, Projects A Cost of equipment 240,000 Projects B 470,000 Working Capital needed 60,000 80,000 Overhaul of the equipment in 12000 14000 two years Annual revenues and costs: 1 Sales revenues 375,000 300,000 Variable expenses 180,000 90,000 Depreciation expense 48,000 78.333 Fixed out-of-pocket operating 90,000 70,000 costs Life of Project 5 year 6 years The working capital will be released 5th and 6th year of the project A and project B respectively, for investment elsewhere within the company Required: 1. Calculate the net present value for each project. (4 Marks) 2. Calculate the simple rate of return for each product. (4 Marks) Which of the two projects (if either) would you recommend that Batelco Inc. accept? Why? (2 Mark) Activate Windows