In keeping with its plans for expansion, the company is appraising the production and sale of a new designer energy drink. This would involve the acquisition of a new machine with a purchase price of R$1600000$ which is expected to have a useful life of six years and a salvage value of R$200000.$ The installation cost of the machine is R$100000.5000$ units are expected to be sold annually. The net profit is expected to be R$30$ per unit. The straight$-$line method of depreciation is used by Colatonic Ltd$.$ The company$$s cost of capital is $16\%.$ If approved, the implementation date would be $02$ January $2025.$

Use the information related to the acquisition of a new machine to calculate the following. $($Ignore taxes.$)$

Use discount factors from the four decimals present value tables only in the relevant calculations.

$4\mathrm{.}1$ Payback Period $($expressed in years and months$).(3$ marks$)$

$4\mathrm{.}2$ Accounting Rate of Return on initial investment $($expressed to two decimal places$).(4$ marks$)$

$4\mathrm{.}3$ Net present value. Your answer must include the present value calculations and the

calculation of the NPV$.(6$ marks$)$

$4\mathrm{.}4$ Internal Rate of Return $($expressed to two decimal places$).$ Your answer must reflect two

NPV calculations $($using consecutive rates$/$percentages$)$ and interpolation. $(6$ marks$)$

$4\mathrm{.}5$ Weighted average cost of capital $($expressed to two decimal places$)$ if the initial investment

is funded by ordinary shares and debt in the ratio $3$:$2$ respectively and the cost of ordinary

shares and cost of debt are $18\%$ and $14\%$ respectively. Your answer must include the

values of the ordinary shares and debt. $(6$ marks$)$