7. 8. Annual property rates will be paid on 01 April 2023 and rates are calculated at R20 per R1 000 of the value of the property. The property is valued at R1 000 000. Regent Retailers expects to have a bank overdraft of R50 000 on 31 January 2023. QUESTION 5 Use the information provided below to answer the following questions. Where applicable, use the present value tables provided in APPENDICES 1 and 2 that appear after QUESTION 5. 5.1 Calculate the Payback Period of both machines (expressed in years, months and days.) (4 marks) 5.2 Which machine should be chosen on the basis of payback period only? Why? (1 marks) 5.3 Calculate the Accounting Rate of Return (on average investment) of Machine A (expressed to two decimal places). (4 marks) 5.4 Calculate the Net Present Value of each machine (amounts expressed to the nearest Rand.) (6 marks) 5.5 Calculate the Internal Rate of Return of Machine B (expressed to two decimal places) using interpolation. (5 marks) INFORMATION Niterra Limited intends purchasing a new machine and has a choice between the following two machines: Machine A Machine B Initial cost Expected useful life R400 000 R400 000 5 years 5 years Scrap value 0 0 Expected net profit or net cash flows Net profit Net cash flows Year 1 Year 2 Year 3 Year 4 Year 5 R20 000 R116 000 R40 000 R116 000 R50 000 R116 000 R70 000 R116 000 0 R116 000 The company estimates that it's cost of capital is 12%. Depreciation is estimated at R80 000 per year. APPENDIX 1: PRESENT VALUE OF R1