(20 Marks) QUESTION 5 REQUIRED Answer the questions based on the information supplied. 5.1 REQUIRED Use the information provided below to calculate the following. Where applicable, use the four-decimal present value tables provided in APPENDICES 1 and 2 that appear after QUESTION 5. 5.1.1 Accounting Rate of Retum (on initial investment) of Machine A (expressed to two decimal places) (4) 5.1.2 Net Present Value of each machine (5) 5.1.3 Internal Rate of Return of Machine B (expressed to two decimal places) using interpolation. (5) INFORMATION Avery Manufacturers intends purchasing a new machine and has a choice between two machines viz. Machine A or Machine B. The cost of each machine is R3 000 000, with each having an expected useful life of five years. Machine A is expected to have a scrap value of R200 000. No scrap value is expected for Machine B. Avery Manufacturers uses the straight-line method of deprecation. The cost of capital is estimated at 16% Machine A is expected to generate the following net profits over its useful life: Year 1 R340 000 Year 2 R280 000 Year 3 R550 000 Year 4 R340 000 Year 5 R160 000 Machine B is expected to generate a net profit of R340 000 per year over the five-year period, Ignore taxes. Machine A Machine B Year I BODO 500 Slis Invest 3 000 ooo Econo Life Depreciation (200000 (200000-600.000) strs