S Use the information provided below to answer the following questions Where applicable, use the present valus tables provided in APPENDICES 1 and 2 that appear after QUESTION 5 8.1 5.2 5.3 Calculate the Payback Period of both machines (expressed in years months and days) Based on the payback periods calculated in question 5.1, which machine should be chosen? Why? Calculate the Accounting Rate of Return (on average investment) of Machine B (expressed to two decimal places (4 marks) (1 marks) (4 marks) 5.4 5.5 Calculate the Not Present Value of both machines (with amounts expressed to the nearest Rand) Calculate the Internal Rate of Return of Machine B (expressed to two decimal places) INFORMATION (6 marks) (5 marks) Mustang Limited intends purchasing a new machine and has a choice between the following two machines Initial cost Expected useful life Machine A Machine B R400 000 R400 000 5 years 5 years R80 000 R80 000 Depreciation per year Scrap value 0 Expected net profit Year 1 R20 000 R38 000 Year 2 Year 3 R30 000 R38 000 R50 000 R38 000 Year 4 R70 000 R38 000 Year 5 R20 000 R38 000 80 NO NO 9 a Y 2 4 F IN 966 N NOO 3 ANY a 86877797 6100 PAN Ban 10 01 CENT s " OPM) 0704 12 14 07730 81 APPENDIX 1 PRESENT VALUE OF R1 0 04751 D1875 07014 0.66 0.4270 01440 03771 0 0.1186 0.6000 14 0.8700 07579 06011 05775 05061 15 08613 07430 0.6019 0.5553 08529 0.7294 06232 0.5339 17 08444 07042 B 07002 05874 0 Mean 0410 03077 016 www DM 078 01405 0 2002 0611 02120 0107 04173 0.36254 03152 02745 0.000 0.1461 01847 02919 02510 02176 01631 01415 01729 05134 04-1 037:4 03160 0411 02701 0.19715 04155 0103 43 01979 cas 60600 60011 6.670 0018 M 01456 0152 01078 60929 60802 02502 02120 0.1790 0.152 01300 0.1103 DSNO 04746 0.3967 0.3305 0.2765 02317 0.1945 01635 01377 D0800 65431 sts 06730 65637 04564 0373 03118 0.2584 0 145 01/14 01466 01:40 01637 oora 6011 00433 BOMB 8779 04778 0.371 02963 0.2330 0.1842 01460 01980 (082) 60738 60471 63003 02514 01741 01314 1420 03754 0067300437 0154 69 60006 65013 N N . 4 MUNT 4 a ay 9 44004 AV 81009 64172 Present valus of a regular annuity of 1 per penod for a periods 9 53801 IN 667179 8758 M 43509 www A 3004 83077 709 TA CIMA 87406 M 9109 112761 3 M 7691 LING 6005 600