Stone Plc is considering investing $1 million on one of two competing projects.

Project A Project B

$000 $000

Initial outlay 1 000 1 000

Expected net cash inflows:

Year 1 450 200

Year 2 550 500

Year 3 250 600

Year 4 150 300

The estimated residual value of both projects after four years is zero. The cost of capital is 10%.

Required: Calculate the

(a) Payback periods

(b) Accounting Rate of return

(c) Discounted cash flow

(d) Net present value

(e) Profitability Index