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  3. at the beginning of 2015 , a business enterprise i

At the beginning of 2015 , a business enterprise is trying to decide between two...

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Accounting

image At the beginning of 2015 , a business enterprise is trying to decide between two potential investments. The forecast details are given below. It is estimated that each of the alternative projects will require an additional working capital of $2,000, which will be received back in full after the end of each project. Depreciation is provided using the straight line method. The present value of RM1.00 to be received at the end of each year (at 10% p.a.) is shown below: Required: Assuming a required rate of return of 10% p.a., evaluate the investment proposals under: (a) Accounting rate of return (b) Payback period (c) Discounted payback period (d) Profitability index

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