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

accepted.

Project A Project B

Initial cost R$1000000$ R$1000000$

Expected life $5$ years $5$ years

Scrap value $($not included in the figures below$)$ R$200000$

Expected net cash inflows: R R

End of year: $1240000290000$

$2260000290000$

$3280000290000$

$4360000290000$

$5300000290000$

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