Telin Ltd purchased a new tractor at a cost of R $80000.$ Annual operating cash inflows are expected

to be R $30000$ each year for four years. At the end of the tractor$$s useful life, the salvage value of

the tractor is expected to be R $5000.$

Required:

$3\mathrm{.}1.$ The company requires a payback period of not more than $5$ years. Indicate, based on this criterion,

whether the project should be accepted. $(8)$

$3\mathrm{.}2.$ Calculate the Net Present Value if the Cost of Capital is $12\%($ignore taxes$).$ Indicate with reasons

whether based on this calculation that this project should be accepted or not. $(12)$

$4\mathrm{.}3.$ Outline the advantages and disadvantages of the Payback Period method. $(5$