• Project Alpha
  • Initial Investment: $10,000
  • Net Cash Flows:
    • Year 1: $4,000
    • Year 2: $3,000
    • Year 3: $5,000
    • Year 4: $2,000
    • Year 5: $1,000
• Project Beta
  • Initial Investment: $15,000
  • Net Cash Flows:
    • Year 1: $5,000
    • Year 2: $4,000
    • Year 3: $6,000
    • Year 4: $3,000
    • Year 5: $2,000
• Project Gamma
  • Initial Investment: $18,000
  • Net Cash Flows:
    • Year 1: $6,000
    • Year 2: $5,000
    • Year 3: $7,000
    • Year 4: $4,000
    • Year 5: $3,000

Requirements:

1. Compute the Accounting Rate of Return (ARR) for each project.
2. Calculate the Net Present Value (NPV) at a 6% discount rate.
3. Determine the Payback Period for each project.
4. Identify which project has the highest ARR.
5. Assess the risks associated with each project based on cash flow variability.