textbook answer

a)Minnie = 2.8years

Mickey = 3.57 years

b)Minnie = 37.07%

Mickey = 28%

c)Minnie = 47982.70

Mickey = 1401.60

d)Minnie = 1.32

Mickey =1.01

2. Gemilang Trading has two proposed investments. Both project involves investments of RM 150,000. Below are the cash flows expected from each project and the cost of capital for both is 12%. The investments have cash flows as follows: Year MINNIE Project (RM) MICKEY Project (RM) 42000 48000 2 42000 50000 65000 42000 55000 42000 42000 60000 3 4 5 For each project, calculate: (a) Payback period (b) Average Rate of return (c) NPV (d) Profitability index (e) Determine which project should be chosen