|
Project A (N$) |
Project B (N$) |
Initial capital expenditure |
50 000 |
50 000 |
Profit (loss) year 1 |
25 000 |
10 000 |
2 |
20 000 |
10 000 |
3 |
15 000 |
14 000 |
4 |
10 000 |
26 000 |
Estimated resale value at end of year 4 |
10 000 |
10 000 |
Notes:
- Depreciation is accounted for on a straight-line method basis
- The cost of capital is ten percent
Determine the average annual rate of return on average capital invested for project A to the nearest whole number
2, When comparing 2 mutually exclusive projects using NPV the general rule is
1 Answer