ABC Ltd is considering an investment in a new machine for the production of a new product X. There are two possibilities, Machine A and Machine B. Both the product and the machine would have an expected life of five years. Given two new machined with profits projected below: Year 1 2 3 4 5 Machine A 60,000 70,000 70,000 40,000 30,000 Machine B 50,000 60,000 80,000 70,000 40,000 The residue value for Machine A and Machine B is N$10,000 and N$3,000 respectively The company's cost of capital is 14 % the appropriate discount factors are: Year 1 0.8772 Year 2 0.7695 Year 3 0.6750 Year 4 0.5921 Year 5 0.5194 Required: To evaluate (showing step-by-step calculations) and advise ABC Ltd. on the machine that should be acquired on the basis of each of the below-listed capital budgeting models/techniques: a) The accounting rate of return (based on average investment). b) Payback period. c) Net present value (NPV). (5 marks) (5 marks) (10 marks) d) Advice on management which project should they accept and why the other project should be rejected ? 2 (5 marks) (Total 25 Marks)