Question 5 Use the information provided to answer the questions. 5.1 5.1.1 5.1.2 Use the information provided below to calculate the following. Where applicable, use the present value tables provided in APPENDICES 1 and 2 that appear after QUESTION 5 Calculate the Payback Period of Project A (expressed in years, months and days). Calculate the Accounting Rate of Return (on average investment) of Project B (expressed to two decimal places). 5.1.3 Calculate the Net Present Value of each project (with amounts rounded off to the nearest Rand). 5.1.4 Use your answers from question 5.1.3 to recommend the project that should be chosen. Motivate your choice. INFORMATION 5.2 Zeda Enterprises has the option to invest in machinery in project A and B but finance is only available to invest in one of them. You are given the folowing projected data Project A Project B Intal cost Scrap value Depreciation per year Net profit F300 000 R300 000 40000 R$2000 R60 000 Year Year 2 Year 3 Year 4 Year 5 Net cash flows Year 1 R20 000 130000 R50 000 R60000 R10000 Year 2 Year 3 Year 4 Year5 R90 000 R90000 R90000 R90000 R90000 Additional information The discount rate used by the company is 12% Use the information provided below to calculate the Internal Rate of Return (expressed to two decimal places) using interpolation INFORMATION A machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year. The machine is expected to have a useful life of four years APPENDIX 1: PRESENT VALUE OF R1