2 A 21 22 Question 2: Comparing Two Projects Using the Payback Method 23 24 25 Project A Project 26 27 Investment 5700,000 $400,000 28 Annusavings $225,000 $110,000 29 30 Payback period 3.1 years 3.6 years 31 32 Rate of 32.15 27.5% 33 34 Base on the Payback calculations above, which project would you accept? Why Assume for project Athe 35 investment was $980,000 and annual savings was $210,000 and for Project Investment was SR50,000 and 36 Questions Annual Savings was $300,000. Which project would you recommend after the changes? Why? How do the changes Answer 37 in Investments and Annual Savines affect the Rate of Returns for each project? What does the changes in Rate of 88 Retum mean to the investor 99 40 11