Study the information provided below and answerthe following questions:
4.1.1	Use the Net Present Value technique to determine the machine that the company should purchase.	(10 marks)
4.1.2	Calculate the Accounting Rateof Return (on initial investment) ofMachine X.	(4 marks)

INFORMATION

Emerald Limited has the choice of purchasing oneof two machines viz. Machine X and Machine Y but funding is available to invest in only one of them (if at all). Each machine costs R10 000 000 and a useful life of five yearsis anticipated. The residual value of each machine is estimated to be R1 000 000. The annual volume of production for each machine is estimated to be 150 000 units, which can be sold for cash at R48 per unit. Depreciation is calculated on the machines using the straight-line method over their respective useful lives. Annual cash operating costs are as follows:

	Machine X	Machine Y
Variable costs per unit	R6.00	R4.80
Fixedcosts (total)	R3 000 000	R3 200 000

The cost of capital is expected to be15%.

4.2

REQUIRED

Use the information provided below to calculate the expected production costfor November 2023. (6 marks)

INFORMATION

Malvern Limited manufactures Product Mac. An estimate of the number of units to be sold during November and December 2023 is given below:

November	3 000
December	3 800

It is anticipated that:

• There will be nowork-in-process at the end of any month.

• Finished units equal to 40% of the expected sales of the following month will be in inventory at the end of each month.

The budgeted production and production costs for the yearending 31 December 2023 are as follows:
Production	36 000 units
Direct materials cost per unit	R50
Direct labourcost per unit	R30
Other manufacturing costs	R216 000