Question: Tutorial 1-5 The company is considering to bid for two projects. Determine the ARR for the two projects A and B, and evaluate which project

Tutorial 1-5 The company is considering to bid for two projects.

Tutorial 1-5 The company is considering to bid for two projects. Determine the ARR for the two projects A and B, and evaluate which project is feasible for good investment. Minimum attractive rate of return is 12.0% per annum. Project A Project B Initial cost (OMR) 56,000 58,000 Annual income less depreciation and taxes (OMR) Year 1 1,375 11,375 Year 2 3,375 9,375 Year 3 4,375 7,375 Year 4 5,375 5,375 Year 5 6,375 3,375 Estimated salvage value after 5 3,000 3,000 years of useful life (OMR)

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