Question 5 Use the information provided to answer the questions. P 5.1 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. 2 5.1.1 Calculate the Payback Period of Project A (expressed in years, months and days). (3 marks) 5.1.2 Calculate the Accounting Rate of Return (on average investment) of Project B (expressed to two decimal places). (5 marks) 4 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. (6 marks) (1 marks) Zeda Enterprises has the option to invest in machinery in projects A and B but finance is only available to invest in one of them. You are given the following projected data: Initial cost Project A Project B R300 000 R300 000 Scrap value R40 000 0 Depreciation per year R52 000 R60 000 12 Net profit Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows Year 1 Year 2 % 10% SHEE 12% 10% 14% 10% 17% 15% 19% 25% ESTOS 91503090003 0.587907722075572207116 06801 6750 175 0040 044 0.0006 0.3804757542 09040 98 s 0.5546 082277529 07529 07350 0204 00355 0003 03821 15 0523 533705158 044409 045 0.329 7000 37530000664069540420 05194 1872 04751 04561 043 04150 43 13 R20 000 15 R30 000 R50 000 R60 000 R10 000 9420 35 62 100 303 36 5660483 04104 38 570038226 78137 7 1 35227 035 05 05 17 45 45 36 193 a 0319 20 2 0.35 LC 07304730 8763 674 35820 0.5400 5019 045 38 54339 0372 350 05050 C2518 2800 287 2017 8048 072405006 06647 1526804751 0429 0385 03806 33 32876 02607 02365 1240 01954 1778 0.1619 0.475 01346 0850 078726881430030 03337 2078 1.1889168815200132 0122208 BEC 7086 ass sc 4G 0399 0.3405 22 3625 022 32306 1807 11 12 1110 coses 008 200 1370300373330203152 745 2354231327 0190140112005 2734224 1380603 0146 1229 11000900008110818 745460200215 216 217 2 083607020584 406 04155 3808 02060 0252 210 012028 1300 38 9546 1088006000508 00439 0896 2018 6897 16 057 0446 03067 1305 026 02817 945 1657 01161 00081 089 L 00500506 002 0086 08 2171543089 18 0.25 0.2145 7 1387 008 cars 008 00914 Cases 00808008 R90 000 07708 R90 000 Year 3 R90 000 Year 4 R90 000 Year 5 R90 000 0146061180006230 30888 0.0470837818400245 CO 0800029 01030088 419 52 412903083 023841740.13400964 078400673 043 3088 0096 cas 1 00116 cooo oo 00084004230012 06717 1452903005 2003 0142 072 0.00021 000 000 100000 1900013000100000000 60D L5 22.5407 CCE2 10643 33329 00213 034 0.0085 06430035 0.0022 0.0014 0.0006 2000400CS 000020 603-81587 0.0351CCESS 0S 00173 0.009 0.0035 019000007 0004 1000000 20001