**COST ACCOUNTING

The following information relates to two capital investment projects.

	project a	project b
initial cost	400 000	300 000
expected useful life	5 years	4 years
scrap value	40 000	nil
expected net cash value	R	R
1st year	100 000	100 000
2nd year	110 000	100 000
3rd year	120 000	100 000
4th year	140 000	100 000
5th year	155 000

the company's cost capital is 12%

4.1Calculate the Payback period for both projects. (3 marks) (Answers must be expressed in years, months and days)

4.2 Calculate the Accounting Rate of Return (on average investment) for Project A. (4 marks)

4.3 Calculate the Net Present Value of each project. (Round off amounts to the nearest rand) (7 marks)