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Solve all and fast Question 5 The directors of Zhang Limited are considerng tree alternative investment proposals, details of which are as foliows. Project Arjun

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Question 5 The directors of Zhang Limited are considerng tree alternative investment proposals, details of which are as foliows. Project Arjun Project Bharat Project Charu Irvitial investment 100,000 125.000 200,000 Net cash flows yrat 1 25,000 35 000 80,000 25,000 Net cash inflows year 2 35 000 60,000 25,000 Net cash inflows ycar 3 35 000 80,000 Nel castillows ya 4 25,000 35.000 30.000 Net cash inflows year 5 25,000 35 000 30,000 The company depreciates as assets on a straight line basis, assuming a life ot hve years with no residual value at the end of that time. Required: a) Using the above intormation, for each of the projects Arjun and Bharat and Charu, Calculate: 1 The Payback Period The Accounting Rate of Return The Net Present Value using a discount rate of 10% Note: Extract of Present Vaue Tables are on page 12 2 3 b) Statc, with reasons which ONE of the two investraent proces the directors of Kish Limited should accept d) Discuss why the Net Present Vakie method of investment appraisal is considered to be theoretically superior to other methods that are frund in prac.lice

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