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d) Delta Corporation is considering two capital expenditure proposals. Both proposals are for similar products...

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Accounting

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d) Delta Corporation is considering two capital expenditure proposals. Both proposals are for similar products and both are expected to operate for four years. Only one proposal can be accepted Depreciation is charged on the straight line basis. Based on the information below: Initial investment Year 1 Year 2 Year 3 Year 4 Profit/(loss) Proposal A $ 46,000 6,500 3,500 13,500 Loss 1,500 Proposal B $ 46,000 4,500 2,500 4,500 Profit 14,500 4,000 4,000 Estimated scrap value at the end of Year 4 Calculate the following for both proposals: i) the payback period to one decimal place in the average rate of return on initial investment, to one decimal place

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