The company is considering two mutually exclusive projects. Both require an initial cash outlay of UGX. 10,000,000 each, and have a life of five years. The company's required rate of return is 10%. The cash flows expected to be generated by the projects are as follows:

Year Project A Project B UGX. 000 UGX. 000 0 (10,000) (10,000) 1 4,000 6,000 2 4,000 3,000 3 4,000 2,000 4 4,000 5,000 5 4,000 5,000.

Calculate from the above the following:

i) Pay Back period (PBP).............................................3 Marks.

ii) Average Rate of Return (ARR)....................................3 Marks

iii) Net Present Value (NPV)............................................3 Marks

iv) Internal Rate of Return (IRR).......................................3 Marks

v) Profitability Index ( PI)..............................................3 Marks

b) Basing on the results obtained in each of the Appraisal Techniques, determine in each case the Project between Project A and B that is preferable and why?...........................................15 Marks Total: 30 Marks.