Astra Ltd intend investing in a new machine. The following details relating to the machine apply: Cost of machine Expected useful life Scrap value Method of depreciation Cost of capital Year 1 2 3 4 5 Profit 'R' -6 000 18 000 100 000 66 000 112 000 R360 000 5 years R 60 000 Straight-line 12% 2 Required: 1.1.1 Calculate the pay-back period 1.1.2 Calculate the accounting rate of return (ARR). 1.1.3 Comment on the above returns taking into account that Astra Ltd requires a payback period of 3 years and a return of at least 40%.