Question: QUESTION 2 (25 Marks) 3. A project requires an initial investment of RM225,000 and is expected to generate the following net cash inflows: Year 1

QUESTION 2 (25 Marks) 3. A project requires an initial investment of RM225,000 and is expected to generate the following net cash inflows: Year 1 2 3 4 Cash inflows RM95,000 RM80,000 RM60,000 RM55,000 a) Compute net present value (NPV) of the project if the minimum desired rate of return is 12%. (15 marks) b) Calculate the accounting rate of return (ARR) of the project assuming the minimum desired rate of return is 12%. (10 marks)

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