Question

Requirement 1 , 2 & 4 are already correctly answered as shown in image provided.

Requirement 3:

ARR is 30%

Average net income of project is \$120,000

Amount of investment is to be calculated

ARR = Average Net Income / Average Investment

here ARR is 30%

plotting values in formula,

30% = \$120,000 / Average investment

Average investment= \$ 120,000 / 30%

= \$ 400,000

therefore average investment is \$ 400,000 if ARR is 30% and net income is \$ 120,000

Company in scenario C invests \$ 400,000 in the project

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