QUESTION 2 32 MARKS NamTelia Limited has a cash surplus which they would like to invest. They have an option between 2 machines that they can buy. Machine A has an outflow of N$125,000. Machine B an outflow of N$100 000 and during the tenth year it can be sold for N$20 500 (also referred to as salvage value) The cost of capital on the investment is 12%. They expect the following cash inflow for the next 10 years: Machine A Machine B Period Cash Inflow (N$) 1 22,500 12,000 2 25,000 13,000 3 27,250 16,900 4 30,000 17,500 5 28,000 15,200 6 29,700 18,600 7 30,000 18,100 8 29,600 19,000 9 28,000 22,200 10 30,000 24,500 a) Calculate the Net Present Values of both investments? (24 marks) b) the payback period of both investments (4 marks) c) Which machine would be advisable to procure? Explain your answer (4 marks)