Question: A business venture identified two variable mutually exclusive projects. The life of each of the projects is estimated to be 5 years. The salvage

A business venture identified two variable mutually exclusive projects. The life of

A business venture identified two variable mutually exclusive projects. The life of each of the projects is estimated to be 5 years. The salvage of each of the projects at its life end is negligible. The minimum attractive rate of return is 12%. Project A1 A2 200,000 280,000 Initial investment (Rs.) Annual Revenue (Rs.) 75,000 90,000 Salvage value 20,000 25,000 (a) Calculate the NPV, Payback period and ARR. (10 marks)

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