1.1 Calculate the Net Present Value for both the Oil Fryers. Show all your calculations as marks may be awarded for this.

1.2 Calculate the payback period for both the Oil Fryers.

1.3 Based on your previous analyses (1.1. and 1.2), advise what machine you would purchase.

Thuli Pennypincher has recently been appointed as Financial Manager of Thabo's Management Company LTD. (TMC) and manages a portfolio of 10 fast food outlets on behalf of the owners, Sibo's Greasy foods (SGF), with the 10 outlets located across the Gauteng Province. The Bulk Oil Fryer that they lease to the main Centurion store is approaching the end of its useful life, and Thuli must decide on what model make of fryer to buy. The fryer is purchased and maintained by TMC, who then lease it to the SGF store. Thuli has requested the Cost and Management Accountant, Mr Gray Beancounter, to investigate the following two possible options for purchasing a new fryer: A: The Cholesterol Killer B: The Blocked Artery Supreme After careful calculation, Mr Beancounter has produced the following figures: Note: The cost of capital for TMC is 12%