REQUIRED

Use the information given below to answer the following questions:

$5\mathrm{.}3\mathrm{.}1$ Calculate the Internal Rate of Retum $($expressed to two decimal places$).$ Ycur answer must include two net present value calculations $($using consecutive cost of capital rates$)$ and interpolation.

$(6$ marks$)$

$(1$ mark$)$

$5\mathrm{.}3\mathrm{.}2$ Based on the IRR should the company consider purchasing the machine? Why?

INFORMATION

Venus Limined is investigating an coporturity to purchase a machine for R$640000.$ The machine is expected generate net cash flows of R$180000$ per annum for five years. The company's cost of capital is $16\%$