QUESTION 6

1. Explain two (2) non-financial factors a company needs to consider before deciding to approve an investment with positive Net Present Value (NPV)? (4 points)

2. Evaluate the proposed projects below. Based on the information given, which project would you choose to take on? Clearly explain your reasons. (3 points)

	Accounting rate of return	Payback period	Net present value
Project 1	25%	2.25 years	69,700
Project 2	21%	5 years	93,600

(4 + 3 = 7 marks)