Evans Corp is planning to invest in a project with the following details:

• Initial investment of R900,000 and an expected residual value of R80,000.

Year	Cashflows	Discount factor
Year 1	R140,000	0.909
Year 2	R160,000	0.826
Year 3	R170,000	0.751
Year 4	R120,000	0.683
Year 5	R130,000	0.621

Cost of capital is 10%. Depreciation is R70,000 per year. Tax rate is 30%.

Required:

1. Calculate each of the following:
   • 1.5.1 Accounting Rate of Return (5)
   • 1.5.2 Payback period (5)