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Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of retum Expected net profit: End of: Year 1 Year 2

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Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of retum Expected net profit: End of: Year 1 Year 2 Year 3 Year 4 Machine A R800 OOO 4 years R200 OOO 12% R20 OOO R60 OOO R140 OOO R120 OOO Machine B R800 OOO 4 years R200 OOO 12% OOO R80 R80000

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