Business 9609 · AS & A Level · Investment appraisal
Investment appraisal — practice question
(a)[2]
From the data in Table 1.3, calculate PPP’s payback period for the proposed new machine.
(b)[2]
From the data in Table 1.3, calculate the accounting rate of return (ARR) for PPP’s proposed new machine.
(c)[12]
Evaluate whether PPP ought to invest in the new machine.
Worked solution & mark scheme
This 16-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Payback means the length of time needed for the original investment cost to be recovered.” …