Elsies Limited is considering the purchase of a machine to manufacture some of the spare parts for the catering

equipment during The company desires a minimum required rate of return of The machine will cost

R plus R for installation and is predicted to have a useful life of five years. A salvage value of

R is estimated. The machine is expected to generate cash inflows of R per year but will require the

employment of two new machine operators at R per year for each operator, and it will require maintenance and

repairs averaging R per year. Depreciation will be calculated using the straightline method. QUESTION

Refer to the investment opportunity for and calculate the following. Ignore taxes. Where discount factors

are required, use the four decimals present value tables that appear in the module guide.

Internal Rate of Return expressed to two decimal places Your answer must reflect two NPV

calculations using consecutive ratespercentages and interpolation.