1026224919.pdf - Adobe Acrobat Reader DC (64-bit) elp Y_Jan22_BB... x QUESTION 2 2 / 3 Initial cost Expected economic life Expected disposal/residual value Expected net cash inflows End of: Year 1 Year 2 Year 3 Year 4 Year 5 Machine A R100 000 5 years R10 000 R 34 000 27 000 Machine B R110000 5 years 0 R 33 000 33000 32000 33.000 30.000 33.000 26000 33.000 18000 22000 Depreciation per year The company estimates that its cost of capital is 14%. 75% 2.1 Calculate the payback period for Machine A and B (answers must be expressed in years, months and days). (5 marks) 2.2 Calculate the accounting rate of return (on average investment) for Machine A. (answer rounded off to 2 decimal places). (4 marks) 2.3 Calculate the net present value of each machine (round off amounts to the nearest Rand) (6 marks) 24 Calculate the internal rate of return for Machine B (5 marks)