INFORMATION Irongate Limited plans to purchase a new machine to increase production capacity. It is currently considering the following alternatives: Alternative 1 A machine can be imported from Germany at a cost of R1 400 000. The machine will have a useful life of five years and is expected to be sold at the end of its useful life for R80 000. Machinery is depreciated on a straight-line basis over its useful life. The machine will result in additional cash inflows as follows: Year Net cash inflow (R) 1 380 000 2 420 000 3 440 000 4 465 000 5 480 000 Alternative 2 A machine can be purchased in South Africa at a cost of R1 200 000. This machine will have a five-year useful life after which it will be scrapped. No proceeds are expected on scrapping. It is expected that this machine will generate net cash inflows of R350 000 per annum over its useful life. The company has a cost of capital of 10%. 2.1 (3 marks) Calculate the payback period for alternative 1 (answers in years, months and days). 2.2 (5 marks) Calculate the net present values for both alternatives. (where applicable,round off amounts to nearest whole number) 2.3 (4 marks) Calculate the accounting rate of return on average investment for alternative 1. (answer rounded to two decimal places) 2.4 (2 marks) Calculate the internal rate of return for alternative 2.(answer rounded to 2 decimal places