Section - B (This question carries 20 marks) 11. A company is considering an investment in a new machine X for the production of Product Z. The product and the machine would have an expected life of five years. The following information is available: Product Z Selling price 200 Variable cost 80 Anticipated sales of Product Z are: Year 1 2 3 4 5 Units 12,000 15,000 16,000 20,000 5,000 There would be an increase in fixed overheads (excluding depreciation of the new machine) of 470,000 per year. Machine details: Machine X Initial cost 1,800,000 Residual value 200,000 The company's cost of capital is 12% and the appropriate discount factors are: Factor 0.893 0.797 0.712 0.636 0.567 Required: Calculate the followings: (1) Accounting rate of return, using average investment 5 Marks (ii) Payback Period 5 Marks (H) Net present value 10 Marks Year 1 2 3 4 5 (Total 20 Marks)