Solution-Calculate and determine which project is better

Calculate and determine which project is better for each

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Reference no: EM133135711

Question - Following are the data for two projects taken from Bennet Company

	Project A (RM)	Project B (RM)
Initial Investment	42,000	45,000

Year	Operating Cash Inflow
1	14,000	28,000
2	14,000	12,000
3	14,000	10,000
4	14,000	10,000
5	14,000	10,000

Required - Calculate and determine which project is better for each of the following capital budgeting techniques:

i. Accounting Rate of Return (Assume salvage value = 0)

ii. Payback Period

iii. Net Present Value (Use cost of capital = 10%)

iv. Profitability Index (Use the same cost of capital in iii. above)

Reference no: EM133135711

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Calculate and determine which project is better for each

Reference no: EM133135711

Reference no: EM133135711

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