Use the information provided to answer the questions.

5.1.2 Calculate the Accounting Rate of Return (on average investment) of Project B (expressed to two decimal places).

INFORMATION Zeda Enterprises has the option to invest in machinery in projects A and B but finance is only available to invest in one of them. You are given the following projected data: Initial cost Scrap value Depreciation per year Net profit Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows Year 1 Year 2 Year 3 Year 4 Year 5 Additional information The discount rate used by the company is 12%. Project A R300 000 R40 000 R52 000 R20 000 R30 000 R50 000 R60 000 R10 000 Project B R300 000 0 R60 000 R90 000 R90 000 R90 000 R90 000 R90 000 Number of Periods 1 2 3 4 10 8 9 10 11 12 7 0.9327 0.8706 0.8131 13 14 15 16 10 18 173 8 1% EX 30 0.9803 0.9612 0.9426 0.9246 5 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 50 0.9610 0.9238 0.8885 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.7938 0.9420 0.8880 0.8375 5% 0.9901 09804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8621 0.8547 0.8475 0.8403 0.8333 0.8000 0.8963 0.7903 0.7462 0.7050 0.8787 0.7730 0.6810 7% 0.9070 0.8900 0.8734 0.8573 0.8417 0.8264 08116 0.7972 0.7831 17 0.8444 0.7142 0.6050 0.5134 0.4363 0.8360 09053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5043 0.7224 0.6496 0.5847 0.5268 0.4751 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.6006 0.5303 0.4688 0.4150 0.8528 0.7284 0.6232 0.5339 0.4581 9% 10% 0.6663 0.6302 0.5963 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.7002 0.5874 0.4936 0.4155 0.8195 0.6730 0.5537 0.4564 0.7722 0.3769 0.6080 0.3715 0.2261 0.1407 0.7419 0.5521 0.4120 0.3083 0.2314 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 04339 0.4039 03762 0.3506 0.3269 0.3050 0.2848 0.2660 0.2487 0.2326 0.1678 11% 0.7513 07312 0.9143 0.8368 0.7664 0.7026 0.6445 0.5919 0.5439 0.5002 0.4604 0.4241 0.3909 0.3606 0.3329 0.3075 0.2843 0.2630 0.2434 0.2255 0.2090 0.1938 0.1342 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.3332 0.31:39 0.2959 0.2791 0.2097 0.4289 0.3875 0.3505 03173 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1945 12% 0.3677 0.3262 0.2897 0.5645 0.5346 0.5066 0.4803 0.3503 0.2969 0.2502 0.2120 0.0872 0.0543 0.0339 0.3855 0.3522 0.2992 0.2633 0.5504 0.3048 0.1697 0.0951 0.0535 0.0303 0.0173 0.7118 0.6931 03118 0.2584 0.2145 0.1784 13% 0.3555 0.3186 0.2858 0.2567 0.3220 0.2875 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.6750 0.6575 0.6407 0.7695 0.7561 0.7432 0.7305 0.7182 0.7062 0.6944 0.6400 15% 16% 17% 18% 0.4556 0.5921 0.5718 0.5523 0.5337 0.5158 0.4987 0.4823 0.4096 0.2575 0.2292 02042 0.1821 19% 20% 0.2607 0.2366 0.2149 0.4972 0.4761 0.4561 0.4371 0.4190 0.4019 0.3277 02090 0.1827 0.1599 0.1401 0.6244 0.6086 0.5934 0.5787 0.5120 0.2320 0.2045 0.1807 0.1597 0.1413 0.4104 0.3898 0.3704 0.3521 0.2946 0.2697 0.2472 0.2267 0.2080 0.1911 0.1756 0.1615 0.1074 25% 0.2307 0.2076 0.1869 0.1685 0.15:20 0.1372 0.1240 0.1122 0.0687 0.1229 0.3349 0.1954 0.1778 0.1619 0.1476 0.1345 0.0859 0.1625 0.1452 0.1299 0.1163 0.1042 0.0935 0.0550 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069 0.0930 0.0811 0.0708 0.0618 0.0541 0.0281 0.0213 0.0134 0.0085 0.0054 0.0035 0.0022 0.0014 0.1252 0.1110 0.0985 0.0876 0.1079 0.0949 0.0835 0.0736 0.0649 0.0779 0.0440 0.1252 0.1078 0.0929 0.0802 0.0693 0.0600 0.0520 0.0451 0.0225 0.1799 0.1528 0.1300 0.1108 0.0946 0.0008 0.0691 0.0592 0.0508 0.0437 0.0376 0.0180 0.1486 0.1240 0.1037 0.0868 0.0728 0.0611 0.0514 0.0433 0.0365 0.0308 0.0061 0.7798 0.6095 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.0923 0.0736 0.0588 0.0471 0.0378 0.0304 0.0245 0.0197 0.0160 0.0129 0.0105 0.0038 0.1635 0.1377 0.1161 0.0961 0.0829 0.0703 0.0596 0.0506 0.0431 0.0367 0.0313 0.0144 0.0352 0.1741 0.1314 0.0994 0.0754 0.0573 0.0437 0.0334 0.0256 0.0196 0.0151 0.0116 0.0090 0.0070 0.0054 0.0042 0.0012 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.0221 0.0154 0.0107 0.0075 0.0053 0.0037 0.0026 0.0019 0.0013 0.0010 0.0007 0.0001 0.0099 0.0057 0.0033 0.0019 0.0011 0.0007 0.0004 0.0002 0.0001 0.0001 . 0.0009 0.0006 0.0004 0.0003 0.0002 0.0001 0.0115 Number of Periods 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 8 1% 30 8 0.9901 0.9804 0.9709 0.9615 0.9524 29410 2.8839 2.8286 2.7751 2.7232 4.8534 4.7135 4.5797 4.4518 4.3295 6.7282 3.9020 3.8077 3.7171 3.6299 3.5460 3.4651 7.6517 3% 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8080 1.7833 1.7591 1.7355 9.4713 8.9826 13.0037 6.4720 6.2303 6.0021 5.7864 5.5824 147179 7.3255 7.0197 6.7327 6.4632 6.2098 12:1337 11.3484 10.6350 9.9856 5.7955 5.6014 54172 5.2421 5.0757 4.9173 4.7665 4.6229 4.4859 4.3553 5% 13.5777 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 15.5623 14.2919 16.3963 14.9920 6% 8.5302 8.1109 7.7217 7.3601 19 17:2250 15.6785 14.3238 13.8651 12.8493 11.9379 11.1184 10.3797 9.7122 25.8077 22.3965 10.3676 9.7868 9.2526 8.7605 8.3064 7.8869 7.4967 7.1390 13.1661 12.1657 11.2551 10.5753 9.9540 9.3851 8.8633 8.3838 7.9427 7.5361 13.7535 18.0456 16.3514 14.8775 7% 0.9346 0.9259 9.3936 12.1062 11.2961 10.5631 9.8986 9.2950 8.7455 32.8347 27.3555 23.1148 13.5903 3.3872 3.3121 8.8527 19.7928 5.9713 2.6730 2.6243 2.5771 2.5313 24869 24437 24018 23612 23216 22832 22459 2.2096 21743 21399 21065 5.3893 5.2064 5.0330 4.8684 4.2124 4.1002 3.9927 3.8897 3.7906 3.6959 3.6048 3.5172 3.4331 8.3577 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 5.7466 6.2469 25 22.0232 19.5235 174131 15.6221 14.0939 12.7834 11.6536 9% 9.1079 8.5595 10% 11% 7.9038 19.6004 17.2920 15.3725 13.7648 12.4090 0.9174 0.9091 8.2442 11.2741 10.4773 9.7632 9.1216 17.1591 15.0463 13.3317 0.9009 17125 4.2305 12% 0.8929 3.2397 3.1699 3.1024 3.0373 2.974529137 1.6901 5.9952 5.7590 5.5370 6.8052 64951 6.2065 7.0236 6.7101 6.4177 6.1446 5.5892 5.6502 54262 5.2161 5.0188 4.8332 4.6586 13% 14% 15% 16% 17% 18% 19% 20% 0.8850 0.8772 0.8696 0.8621 5.5348 5.3349 5.1461 4.9676 4.7988 1.6681 1.6467 1.6257 1.6052 1.5852 1.5656 1.5465 1.5278 4.1114 3.9975 3.8887 47122 4.5638 4.4226 4.2883 4.1604 4.0386 3.9224 3.8115 3.7057 3.6046 12.6593 11.5896 10.8276 10.0591 9.3719 8.7556 8.2014 7.7016 72497 2.8550 2.7982 27432 2.6901 2.6386 2.5887 3.3522 3.2743 3.1993 3.1272 3.0576 2.9906 50 39.1961 314236 25.7298 21.4822 18.2559 15.7619 13.8007 12.2335 10.9617 99148 9:0417 0.8547 0.8475 0.8403 0.8333 3.7845 3.6847 3.5892 3.4976 3.4098 3.3255 4.4873 5.9377 5.6869 5.4527 5.2337 5.0086 5.3282 5.1317 4.9464 4.7716 4.6065 4.4506 4.3038 4.1633 4.0310 11.9046 10.7574 9.7791 8.9511 8.2438 7.1607 6.8137 6.4924 6.1944 59176 5.6603 5.4206 5.1971 4.9884 4.7932 4.6105 4.4392 4.2072 7.4869 7.1034 6.7499 6.4235 6.1218 5.8424 5.5831 5.3423 5.1183 4.9095 4.7147 4.5327 8.3126 78237 7.3792 6.9740 6.6039 6.2651 5.9542 5.6685 5.4053 7.7862 7.3667 6.9819 6.6282 6.3025 6.0021 5.7245 5.4675 5.2293 5.0081 4.8023 4.6106 8.5436 8.0216 75488 7.1196 6.7291 6.3729 6.0472 5.7487 5.4746 44.9550 34.7609 27.6796 22.6235 18.9293 16.1614 14.0392 12.3766 11.0480 9.9672 9.0736 8.3240 8.0607 7.6061 7.1909 6.8109 6.4624 6.1422 5.8474 5.5755 5.3242 5.0916 4.8759 4.6755 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.8393 7.3658 6.9380 6.5504 6.1982 5.8775 5.5845 5.3162 5.0700 4.8435 4.0776 3.9544 3.8372 6.8399 6.4674 6.1280 5.8178 5.5339 4.3389 4.1925 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.9633 7.4694 7.0248 6.6231 6.2593 5.928856278 5.3527 5.1009 4.8696 4.6560 4.4865 4.3271 7.6344 7.1050 6.6418 6.2335 8.3045 7.6752 7.1327 6.6605 6.2463 7.6873 7.1401 6.6651 6.2402 10.6748 9.8226 9.0770 84217 7.8431 7.3300 6.8729 6.4641 6.0971 5.7662 5.4669 5.1951 4.9476 11.2578 10.2737 94269 8.6938 8.0552 7.4967 7.0027 6.5660 6.1772 5.8294 5.5168 5.2347 4.9789 5.1624 4.9377 4.7296 5.2223 4.9097 4.7746 5.2732 5.0333 4.8122 5.5819 5.8713 5.5482 5.2582 5.8801 5.5541 5.2623 4.9995 5.5553 5.2630 4.9999