Page 5 of 5 QUESTION 3 (Approximate completion time: 35 mins) ICLO 6] (Total 25 marks) Jude is considering investing in three projects: Sagicor, Scotia and Omni with initial investments of $300,000, $250,000 and $320,000 respectively. Each project is expected to have a life of five (5) years and an ending book value of $150,000. The expected profits generated by the projects are as follows: Profits after tax and depreciation Project Sagicor Project Scotia Project Omni S $ 90,000 30,000 40,000 90,000 60,000 80,000 110,000 120,000 160,000 55,000 33,000 44,000 90,000 57,000 76,000 435,000 300,000 400,000 a. As the Accountant you have been asked to assist Jude in deciding which project to invest in by calculating: i. the average profits for each project. (6 marks) ii. the average capital for each project. (6 marks) 111. the accounting rate of return (ARR) on initial capital for each project. (6 marks) iv. the accounting rate of return (ARR) on average capital for each project. (6 marks) b. Based on your calculations, which Project would you recommend for Jude to invest in? (1 mark) END OF ASSESSMENT