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cost Cted economic life Machine A R100 000 5 years Machine R110 000 5 years 0 cted disposal/residual value R10 000 cted net cash

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cost Cted economic life Machine A R100 000 5 years Machine R110 000 5 years 0 cted disposal/residual value R10 000 cted net cash inflows R f: Year 1 Year 2 Year 3 Year 4 Year 5 eciation per year R 34 000 33 000 27.000 33 000 32 000 33 000 30.000 33 000 26 000 33 000 18 000 22 000 ompany estimates that its cost of capital is 14%. Calculate the payback period for Machine A and B (answers must be expressed in years, months and days). Calculate the accounting rate of retum (on average investment) for Machine A. (answer rounded off to 2 decimal places). Calculate the net present value of each machine (round off amounts to the nearest Rand). ER BU

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