Question: Orked Zara Sdn Bhd is evaluating the data for two projects as follows: Project A (RM) Project B (RM) Initial Investment 21,000 22,500 Year Operating

Orked Zara Sdn Bhd is evaluating the data for two projects as follows:

Project A

(RM)

Project B

(RM)

Initial Investment

21,000

22,500

Year

Operating Cash Inflow

1

7,000

14,000

2

7,000

6,000

3

7,000

5,000

4

7,000

5,000

5

7,000

5,000

For each project, calculate the following capital budgeting techniques:

  1. Accounting Rate of Return (Assume salvage value = 0)

  1. Payback Period

  1. Net Present Value (Use cost of capital = 10 percent)

  1. Profitability Index (Use the same cost of capital in (c) above)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!