Apple Limited is a South African based manufacturer of Generators, an award$-$winning generator. The company is currently

investigating two investment projects. The information is given below:

Project South Africa

Involves extending the company$$s production facility in Kwa$-$Zulu Natal. The plant will cost R$91$ million and is expected to

create an additional annual profit of R$9\mathrm{.}9$ million for the $8$ years life of the project.

The following expenses were included in the annual profit:

$$ Depreciation was calculated on the straight$-$line method, over the life of project.

$$ Share of existing overheads, borne by head office amounting to R$975000$p$.$a$.$

$$ Additional fixed cost of R$950500.$

Project Taiwan

Involves setting up an independent manufacturing facility in Taiwan. The cost of the facility would be an initial outlay

$320000000$ Taiwan dollars. This would result in:

$$ annual profit of $60000000$ Taiwan dollars, for the $8$ years of the project.

$$ The annual fixed costs and variable costs are $16000000$ and $15200000$ Taiwan dollars respectively. These costs

were not included in the profit calculation.

$$ Consultant fees of $1325000$ Taiwan dollars were incurred and included in the calculation of profit for Project Taiwan.

Note:

$$ Apple Limited current cost of capital is $15\%.$

$$ The Taiwanese inflation is expected to exceed the South African inflation by $4\%$ p$.$a$.$ throughout the life of the project.

$$ The current spot rate exchange is $4\mathrm{.}5$ Taiwan dollars to the Rand.

Required:

Compute the necessary calculations and advise Apple Limited if it is worth investing in neither, in one or both of these two

opportunities.