Business 9609 · AS & A Level · Investment appraisal

Investment appraisal — practice question

Refer to Table 1.2 and Table 1.3 in the case study.

(a)[2]

From the figures in Table 1.2, calculate the payback period for the country C location.

(b)[2]

Using the data in Table 1.3, calculate the accounting rate of return (ARR) for the country D location.

(c)[12]

Evaluate which location KTJ should choose for its new factory.

Worked solution & mark scheme

This 16-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Payback is reached in the fifth year” …