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ESTION ONE ( 2 5 Marks ) REQUIRED 1 . 1 Calculate the Payback Period of both machines. ( Answers must be expresses in years,
ESTION ONE Marks
REQUIRED
Calculate the Payback Period of both machines. Answers must be expresses in years, months and days. Marks
Calculate the Accounting Rate of Return on average investment of Machine A Marks
Name one advantage of using net present value as a capital investment appraisal technique. Marks
Calculate the Net Present Value of each machine. Round off amounts to the nearest Rand. Marks
Calculate the Internal Rate of Return of Machine B Marks
INFORMATION
Vierra Limited intends purchasing a new machine and has a choice between the following two
machines:
Machine A Machine B
Initial cost R R
Expected useful life years years
Scrap value
Expected annual profit: R R
End of: Year
Year
Year
Year
Year
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