Q.3 Calm Ltd has the following data relating to two investment projects, only one of which may be selected: Project Bee Project Aee ($) ($) Initial capital expenditure 500,000 500,000 Cash-flows year 1 250,000 100,000 2 200,000 100,000 3 150,000 140,000 4 100,000 260,000 Estimated resale value at the end of year 4 100,000 100,000 The cost of capital is 10 per cent, and depreciation is calculated using straight line method. a. Calculate for each of the project: i. Average annual accounting rate of return on average capital invested Net Present Value ii. 111. Internal Rate of Return b. Discuss the relative merits of the methods of evaluation mentioned above in (a).