The management of BMX ltd is considering an investment project. The following data are provided.

Cost of plant and equipment K27,000,000

Salvage value -0-

Useful life 3 years

Expected profit/loss

Year 1 K7,500,000

Year 2 (5,250,000)

Year 3 6,750,000

BMX uses the straight-line method of depreciation for all fixed assets. The estimated cost of capital is 10 percent.

Required:

1. Calculate for the project

1. The accounting rate of return
2. The payback period
3. The net present value
4. The internal rate of return