Hanex limited is considering investing 50,000 in a new machine with an expected life of five years .the machine wil have ascrap value at the end of five years .It is expected that 20,000units will be sold each year at a selling price of 3.00per unit.variable production cost are expected to be 1.65 per unit,while incremental fixed costs,mainly the wages of maintance engineer are expected to be10,000per year.hanex limited uses a discount rate of 12% for investments apraisal purposes and expects investiment project to recover their initial investment within two years.

required

(a) calculate and comment the payback period of the project.

(b)calculate and comment on the net present value of the project

(c)Identify the limitations of the Net present value techniques when applied generally to investment appraisal.

(d)Explain why risk and uncertainty should be considered in the investment appraisal process.