FIVE Note: Where applicable, use the present value tables that appear after this question. 5.1 REQUIRED Study the information given below and calculate the following in respect of the machine: 5.1.1 Net Present Value, if the machine is expected to have a salvage value of R50 000. 5.1.2 Internal Rate of Return, if the machine has no salvage value. INFORMATION Malta Limited is considering the purchase of a machine. The machine will cost R1 000 000 plus installation costs of R200 000 and it is expected to have a useful life of five years. The machine is expected to generate net cash flows of R300 000 per year. The company desires a minimum required rate of return of 12%. 5.2 REQUIRED Study the information given below and calculate the following for both projects: 5.2.1 Payback Period (expressed in years, months and days). 5.2.2 Accounting Rate of Return (on average investment). 5.2.3 Net Present Value. INFORMATION The following data relate to two investment projects, only one of which may be selected: Project A Project B R R Initial capital expenditure 200 000 200 000 Net profit (loss) per year: Year 1 55 000 17 000 Year 2 25 000 17 000 Year 3 15 000 17 000 Year 4 (9 000) 17 000 Expected resale (scrap) value 20 000 0 Note: The cost of capital is 15%