Required:

$($a$)$ Determine the accounting rate of return $($ARR$)$ for each project if the cash flows shown

above are the actual accounting profits.

$($b$)$ Calculate the payback period for each project.

$($c$)$ Justify on the project which you would prefer to invest in based on your

calculations

in part $($a$)$ and $($b$)$ above.

$($d$)$ Identify TWO disadvantages each for accounting rate of return $($ARR$)$ and payback period.