(A)Determination of the payback period (2 marks) = The time when the investment reaches break point. (B) Calculation of the Accounting Rate of Return (ARR) Formula and Calculation Accounting Rate of Return Mark (2 marks) Total Lifetime Cashflows (5 marks) Total Depreciation (3 marks) Total Lifetime Profit |(2 marks) (2 marks) Average Annual (Total Lifetime Profit + Project Life) Accounting Profit Calculation of Average Investment: (3 marks) ARR calculation |(1 mark) (Total of 18 marks for this part) (B)Calculation of NPV (12 marks): TASK 3 The directors of DKM Leicester Limited are considering investing in producing a Student Covid-19 vaccine testing kit to tackle the new Omicron variant in the UK. The project is estimated to have the following cash flows in the five (5) year period, and the company has a required rate of return at 18%. Year 0 1 2 3 4 5 5 Investment cost Net cashflow Net cashflow Net cashflow Net cashflow Net cashflow Residual value at project end Net Cash Flow (millions) 3,900,000 3,400,000 3,350,000 800,000 700,000 300,000 700,000