The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be

accepted.

Project A

Initial cost :R$1000000$

Expected life : $5$ years

Scrap value $($not included in the figures below$)$ R$20000$

Expected net cash inflows:

End of year:

End year $1-$ R$240000$

End Year $2-$ R$260000$

End Year $3-$ R$280000$

End Year $4-$ R$360000$

End Year $5-$ R$300000$

Project B

Initial cost :R$1000000$

Expected life : $5$ years

Scrap value $($not included in the figures below$)$ R$0$

Thexpected net cash inflows:

End of year:

End year $1-$ R$290000$

End Year $2-$ R$290000$

End Year $3-$ R$290000$

End Year $4-$ R$290000$

End Year $5-$ R$290000$

Company estimates that its cost of capital is $12\%.$

REQUIRED

Use the information provided below to calculate the following:

$2\mathrm{.}1$ Payback Period of Project B $($answer expressed in years, months and days$).$

$2\mathrm{.}2$ Return on investment of Project A $($answer expressed to two decimal places$).$

$2\mathrm{.}3$ Net Present Value of both projects.

$2\mathrm{.}4$ Internal Rate of Return of Project B $($answer expressed to two decimal places$).$