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REQUIRED Use the information provided below to calculate the following. Where applicable, use the present value tables that appear after QUESTION 5. 5.1 Payback period

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REQUIRED Use the information provided below to calculate the following. Where applicable, use the present value tables that appear after QUESTION 5. 5.1 Payback period of both machines (expressed in years, months and days.) (6 marks) 5.2 Accounting Rate of Return (on average investment) of Machine A (expressed to two decimal places). (3 marks) 5.3 Net Present Value of both machines. (6 marks) 5.4 Internal Rate of Return of Machine B (expressed to two decimal places) using interpolation if the net cash flows are R290 000 per year for four years. (5 marks) INFORMATION Trump Limited intends purchasing a new machine and has the option of purchasing Machine A or Machine B. The following details apply: END OF PAPER APPENDIX 1: PRESENT VALUE OF R1 APPENDIX 2: PRESENT VALUE OF A REGULAR ANNUITY OF R1 PER PERIOD FOR N PERIODS

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