5.0 Stellen Co Ltd is considering two investment projects, Project Kherson and Project Kramatorsk, each of which requires an initial investment of R500 000.The Company s cost of Capital is 20 %.Assume that the projects will produce the following after tax cash flows:

5.1 Calculate the Average Return for each project.

5.2 Calculate the payback (PBP) for each project

\begin{tabular}{|l|l|l|} \hline Year & PROJECT Kherson (R) & Project Kramatorsk (R) \\ \hline 1 & 100000 & 250000 \\ \hline 2 & 150000 & 200000 \\ \hline 3 & 250000 & 150000 \\ \hline 4 & 400000 & 100000 \\ \hline \end{tabular}