Question 5 [20 Marks] Closs Clothing is evaluating the purchase of computerized clothes design software. The software is expected to cost R160 000. It has a useful life of five years and a zero salvage at the end of its useful life. Assume the following depreciation patterns for the asset: Year 1 2 3 4 5 UAWN Percent Deductible 20 32 19 15 14 The company's tax rate is 30 percent, and its cost of capital is 8 percent. The software is expected to generate the following cash savings and cash expenses: AWN 1 2 3 4 5 Cash Savings R60 000 67 000 72 000 60 000 49 000 Cash Expenses R9 000 7 000 13 000 8 000 5 000 Required: 1. 2. 3. Calculate the net present value. Calculate the payback time. Calculate the profitability index. Discuss the appropriateness of making such investment. What other factors should the company consider in evaluating this investment? (8) (3) (3) (3) (3) 4. 5