
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 straightline 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