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Company A has provided figures for two investment projects, only one of which may be chosen. These are the calculations based on the figures:   Payback Period The Accounting Rate of Return / Return on Capital Employed Net Present Value Project A 2 years 4 months 27.08% £63,705 Project B 2 years 7 months 39.47% £74.971 Analyse and provide recommendations as to what project needs to be chosen based on the calculations above

Company A has provided figures for two investment projects, only one of which may be chosen. These are the calculations based on the figures:   Payback Period The Accounting Rate of Return / Return on Capital Employed Net Present Value Project A 2 years 4 months 27.08% £63,705 Project B 2 years 7 months 39.47% £74.971 Analyse and provide recommendations as to what project needs to be chosen based on the calculations above

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 3PB: Net present value method, present value index, and analysis for a service company First United Bank...
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Company A has provided figures for two investment projects, only one of which may be chosen. These are the calculations based on the figures:

 

Payback Period

The Accounting Rate of Return / Return on Capital Employed

Net Present Value

Project A

2 years 4 months

27.08%

£63,705

Project B

2 years 7 months

39.47%

£74.971

Analyse and provide recommendations as to what project needs to be chosen based on the calculations above.

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