K-Way Limited (Ltd), a softdrink manufacturer has the option to invest in machinery for projects A and B. However due to constraint financial resources the company may only be able to invest in one of them. You are given the following projected data: Additional information: - Project A machinery will be disposed of at the end of year 5 with a scrap value of R20 000 . - Project B machinery will be disposed of at the end of year 5 with a nil scrap value. - Depreciation is calculated on a straight-line basis. - The discount rate to be used by the company is 12%. Required: 1.1 Calculate the accounting rate of return for project A and B. (5 marks) 1.2 Determine the payback period for each project. (5 marks) 1.3 Calculate the net present value of each project. (7 marks) 1.4 Using your answers from question 1.3 above, choose with reasons the most suitable project? ( 3 marks) 1.5 Calculate the internal rate of return for project B