CLEO TRADING has supplied the following information in respect of their proposed investment in Solar Panels for their premises.

INFORMATION:

INVESTMENT DETAILS

Cost of investment $[$ solar panels $]$

R $700000$

Expected lifespan

$5$ years

Depreciation

Straight line

Expected constant cash inflow over its lifespan

R$190000$

Required :

$3\mathrm{.}2\mathrm{.}1$ Calculate the Payback Period in years, months and days. $(4$ marks$)$

$3\mathrm{.}2\mathrm{.}2$ Calculate the Internal Rate of Return from the information below: $(4$ marks$)$

NPV $11\%$

NPV $12\%$

R $2221$

$($ R $15088)$

INVESTMENT DETAILS

Cost of Investment $[$ machine $]$

R$900000$

Expected lifespan

$5$ Years

Cost of capital

$20\%$

Depreciation

Straight line

Residual value

R $100000$

Expected cash inflows Y$1$

R$250000$

Y$2$

R$300000$

Y$3$

R$380000$

Y$4$

R$320000$

Y$5$

R$250000$

Average annual profits

R$140000$