Question
Project A Project B Project C Project D Initial Investment $50,000 $200,000 $100,000 $500,000 PV of cash inflows $60,000 $220,000 $105,000 $575,000 Payback Period in
| Project A | Project B | Project C | Project D | |
| Initial Investment | $50,000 | $200,000 | $100,000 | $500,000 |
| PV of cash inflows | $60,000 | $220,000 | $105,000 | $575,000 |
| Payback Period in years | 3.6 Years | 3.2 Years | 4 Years | 2 Years |
| ARR | 12% | 15% | 17% | 8% |
| NPV of project | $10,000 | $20,000 | $5,000 | $75,000 |
I only needs 1 machine (project). If they use ARR method to select their project, which project will they choose?
A.
Project B
B.
Project C
C.
Project D
D.
Project A
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Cases In Auditing
Authors: Josephine Maltby
2nd Edition
1853963127, 978-1853963124
