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QUESTION 1 MARKS: 17 The following data relate to two investment proiects: Additional information 1. Prolit is calculated before deducting straight-line depreciation. 2. The cost
QUESTION 1 MARKS: 17 The following data relate to two investment proiects: Additional information 1. Prolit is calculated before deducting straight-line depreciation. 2. The cost of capital is 10%. Required: 1.1 Calculate the Accounting Rate of Return (ARR) for Project A. (4.5 marks) 1.2 Calculate the ARR for Project B. (4.5 marks) 1.3 Based on ARR, which project would you recommend for acceptance? Why? ( 1 marks) 1.4 Calculate the Payback period for Project A. (3 marks) 1.5 Calculate the Payback period for Project B. (4 marks)
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