5. Daniyar has run a successful manufacturing business for several years. He currently has $140000 in the business bank account. Daniyar is considering replacing one of his current machines with either Machine A or Machine B. The following information is avaliable: All revenue and expenditure is expected to accrue evenly throughout the life of each machine. Annual net cash flows for each machine stay the same every year. The cost of capital is 8%. The discount factors are: The company policy is to depreciate all non-current assets over their expected life using the straightline method. Neither machine will have any residual value. Answer the following questions in the Question Paper. Questions are printed here for reference only. (a) Explain the difference between the net present value and payback methods of investment appraisal. [4] (b) Calculate: (i) the payback period for Machine B [2] (ii) the net present value for Machine A [8] (iii) the average rate of return for both machines. [6] (c) Advise Daniyar which machine he should purchase. Justify your decision. [5] [Total: 25]