(20) QUESTION 2 INFORMATION: Vista Limited intends purchasing a new machine and has a choice between the following two machines: Equipment A R220 000 5 years Nil R Equipment B R240 000 5 years Nil R Initial cost Expected useful life Scrap value Expected net cash inflows: End of: Year 1 Year 2 Year 3 Year 4 Year 5 55 000 60 000 62 000 60 000 70 000 70 000 70 000 70 000 70 000 70 000 The company estimates that its cost of capital is 12%. Required: 2.1 Calculate the Payback period of both equipment. (Answers must be expressed in years, months and days). (4) 2.2 Calculate the Accounting Rate of Return (on initial investment) for both equipment A and B. (Answers must be expressed to 2 decimal places). (5) 2.3 Calculate the Net Present Value of each equipment. (Round off amounts to the nearest Rand.) (6) 2.4 Calculate the Internal Rate of Return of Equipment B