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FOOD BY THE GIFT COMPANY INVESTMENT YEAR CASH FLOW 0 (R60 000) 1 R10 000 2 R12 000 3 R28 000 4 R20 000 5

FOOD BY THE GIFT COMPANY INVESTMENT YEAR CASH FLOW 0 (R60 000) 1 R10 000 2 R12 000 3 R28 000 4 R20 000 5 R30 000 Required: 1.1 Calculate the payback period. (8) 1.2 Calculate the accounting rate of return (ARR) (Assume that there is no depreciation). (8) 1.3 Must the investment be considered positively or negatively? Give reasons (4) 1.4 Provide advantages of using the Net Present Value (NPV). (5)

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