Ista Ltd has the option to invest in machinery in projects A and B but finance is only available to invest in one of them. You are given the following projected data: Additional information: 1. All cash flows take place at the end of the year except the original investment in the project which takes place at the beginning of the project. 2. Project A machinery will be disposed of at the end of year 5 with a scrap value of R60 000 . 3. Project B machinery will be disposed of at the end of the year with a nil scrap value. 4. Depreciation is calculated on a straight-line basis. 5. The discount rate to be used by the company is 12%. Required: 3.1 Calculate the payback period for project B. (6 3.2 Calculate the accounting rate of return for project A. (6 3.3 Calculate the net present value of each project. (10 3.4 Using your answers from question 3.3, indicate which project should be chosen. Justify your answer| (3)