$02.$ Investment appraisal is a way that a business will assess the attractiveness of possible investments or projects based on findings of several different capital budgeting techniques.

a$.$ Explain three capital budgeting techniques available for investment appraisal.

b$.$ You are the management accountant in your company and currently considering a project to purchase a new machinery. The machine will cost Rs$.3,800,000$ and will have a useful life of $05$ years. The following are the estimated profits and losses for this projects.

Year Profit

$1240000$

$21040000$

$31240000$

$4840000$

$5260000$

The depreciation of the machine has been deducted when estimating the above profits. The machine will have a residual of Rs$.300,000$ at the end of its useful life. The company uses a cost of capital of $15\%$ to appraise the project of this type.

Based on the above information you are required to:

i$.$ Calculate payback period, accounting rate of the return and net present value of the project.

ii$.$ Discuss the financial feasibility of the proposed project.