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Please I need it as soon as possible Question Completion Status: 1 2 3 4 S Question 2 10 points Save Answer Batelco Inc. is
Please I need it as soon as possible
Question Completion Status: 1 2 3 4 S Question 2 10 points Save Answer Batelco Inc. is considering two mutually exclusive projects A and B. Each project requires an initial investment as presented in the below table. The economic life of the project A will be 5-Year's and Project B will be 6 years, and both projects carry same risk. Batelco Inc uses a discount rate of 12%. After considering the current economic situation Batelco Inc. has set a maximum payback period of 4 years and minimum return on investment (ROI) 18%. A financial analyst, prepared estimates of the annual revenues and costs associated with each project as in the below table: Projects B Projects A 240,000 470,000 80,000 60,000 Cost of equipment Working Capital needed Overhaul of the equipment in two years 12000 14000 Annual revenues and costs: 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) Activate Windows Go to Settings to activate Windows. 3. Which of the two projects (if either) would you recommend that Batelco Inc. accept? Why? (2 Mark) Present value tables are given below to determine the appropriate discount factor(s) using the tables providedStep by Step Solution
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