Omega Limited intends purchasing a new machine and has a choice between the following two machine:

Machine ABC:

The cost of this machine is R$200000$ with an expected economic life of $5$ years and a residual value of R$20000.$ Depreciation is calculated on the straight$-$line method. The expected new cash flows are as follows:

Machine XYZ:

The cost of machine XYZ is R$220000.$ It has an expected economic life of $5$ years with no residual value.

Depreciation is calculated on the straight$-$line method. The expected new cash flows are R$66000$ per annum every year for the $5-$year period.

Omega Limited estimates that its cost of capital is $14\%.$

Required:

$2\mathrm{.}1$ Calculate the payback period for machine XYZ $($answers must be expressed years, months and days$)$

$2\mathrm{.}2$ Calculate the accounting rate of return for Machine ABC.

$2\mathrm{.}3$ Explain two advantages of using the accounting rate of return in capital investment appraisal.

$2\mathrm{.}4$ Calculate the net present value of each machine $($round off to nearest rand$).$

$2\mathrm{.}5$ Calculate the internal rate of return for Machine XYZ$.$