Question: Cash Flows for Two Investments Year Commodity A Commodity B 0 1 30,000 30,000 2 40,000 30,000 3 50,000 30,000 60,000 20,000 Project Commodity A
| Cash Flows for Two Investments | ||
| Year | Commodity A | Commodity B |
| 0 | ||
| 1 | 30,000 | 30,000 |
| 2 | 40,000 | 30,000 |
| 3 | 50,000 | 30,000 |
| 60,000 | 20,000 |
| Project | ||||
| Commodity A | 180,000 | 90,000 | 22,500 | |
| Commodity B | 110,000 | 90,000 | 5,000 |
1.a. Complete the table above in the right to calculate simpler rate of return for commodity and . Assume that your initial investment fully depriciates. 1.b. If the you requrired to have a return of . In this case, which commodity would you choose and why? The commodity that I would choose would be Commodity A as it has the highest Simple Rate of Return and is the closest to . For cash flows it would be better to have a higher rate of return than a lower rate
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