$5\mathrm{.}3$ Net Present Value of Project B and Project C$.$ Your answers must indude the calculations of the present values and net present values.

$(6$ marks$)$

$5\mathrm{.}4$ Internal Rate of Retum $($expressed to two decimal places$)$ of Project B$.$ Your answer must include two net present value calculations $($using consecutive cost of capital rates$)$ and interpolation.

$(6$ marks$)$

INFORMATION

The following information relates to three possible capital expenditure projects. Because of capital rationing, only one project can be accepted.

$\backslash$table$[[,$Project A$,$Project B$,$Project C$],[$Investment$,$R$800000,$R$1000000,$R$800000],[\backslash$table$[[$Expected scrap value$],[($not included in the figures below$)]],0,0,$R$80000],[$Depreciation$,$R$160000,$R$200000,$R$144000],[$Expected net cash flows:,R$,$R$,$R$],[$End of year $1,380000,310000,280000],[2,340000,310000,460000],[3,310000,310000,400000],[4,290000,310000,240000],[5,260000,310000,180000]]$

The company estimates that its cost of capital is $15\%.$ The useful life of each project is five years.

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