4.2	REQUIRED
Study the information given below and calculate the Accounting Rate of Return on initial
investment (expressed to two decimal places) of each project.			(6 marks)
INFORMATION
The following data relate to two investment projects, only one of which may be selected:
		Project A	Project B
		R	R
Initial capital expenditure		180 000	180 000
Net cash inflow per year:
	Year 1	90 000	36 000
	Year 2	72 000	36 000
	Year 3	54 000	86 000
	Year 4	36 000	94 000
Expected scrap value (not included in the figures above)		36 000	0

Note:

Depreciation is calculated using the straight-line method.

The cost of capital is 15%.