Question 3 3.1 Kalafong Provincial hospital is considering an investment of R70,000 for an X-ray machine. There is no increase in working capital requirements and no tax credits Depreciation is straight line and the salvage value is zero The tax rate is 35% and the required rate of return is 15% Cash operating costs are R10 000. Cash operating revenue are R30.000 per year. The estimated life of the X-Ray machine is five years Required: 311 Determine the Average rate of return (ARR) for the equipment investment (3) 312 Determine Net Present Value (NPV) at 10% for the equipment investment. (3) 313 Determine the Profitability Index (PI) for the project (3) is the X-Ray machine a desirable investment? Explain your answer in a memo to the project manager? (3) 3.14 Given that you wish to use payback rule with a cut-off period of 1.3 years, will you invest in these project? (2) 32 Medlab is a leading manufacturer of heart valve implants in South Africa. The supply chain manager has received funds from the head office for the acquisition of some of the capital equipment to be used in its plant. As a supply chain manager discuss the role of purchasing and supply management in the purchasing of capital equipment. (8) wer! [22] Page 3 of 6