eads are paid for in the month in which they are incurred.

$10.$ The balance in the bank account on $31$ January $2025$ is expected to be R$100000.$

QUESTION $3(20$ Marks$)$

Note: Where discount factors are required use only the present value tables $($Appendix $1$ and $2)$ that

appear after QUESTION $3.$

REQUIRED

Study the information provided below and calculate the following:

$3\mathrm{.}1$ Payback period of both projects $($expressed in years, months and days.$)(6$ marks$)$

$3\mathrm{.}2$ Accounting Rate of Return on average investment of Project X $($expressed to two decimal

places$).(3$ marks$)$

$3\mathrm{.}3$ Net Present Value of Project X$.$ Your answer must include the calculations of the present

values and the net present value. $(3$ marks$)$

$3\mathrm{.}4$ Benefit Cost Ratio of Project Y $($expressed to two decimal places$).(3$ marks$)$

$3\mathrm{.}5$ Internal Rate of Return of Project Y $($expressed to two decimal places$).$ Your answer must

include the calculation of two net present values $($using consecutive rates$)$ and

interpolation. $(5$ marks$)$

INFORMATION

The following information relates to two projects under consideration by BVN Limited:

Project X Project Y

Initial cost R$1000000$ R$1000000$

Expected life $5$ years $5$ years

Expected scrap value $($not included in the figures below$)$ R$1000000$

Average annual profit R$122000$ R$110000$

Expected net cash flows: R R

End of year $1350000310000$

$2340000310000$

$3270000310000$

$4300000310000$

$5250000310000$

The company estimates that its cost of capital is $12\%.$

END OF PROJECT