Average Rate of Return
February 16th, 2023
ABC LTD is considering two mutually exclusive projects requiring an initial cash outlay of 10,000 each and with a useful life of 5 years. The company required rate of return is 10%. Cash flows are given as follows:YEAR 1 2 3 4 5Project A 3,000 3,000 3,000 3,000 3,000Project B 4,000 2,500 2,000 3,500 3,500Required:Calculate for each projecti. The payback periodii. The average rate of returniii. The net present valueiv. Profitability indexv. The internal rate of return
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