$5\mathrm{.}2$

REQUIRED

Answer the following questions based on the information provided below:

$521$ Calculate the Internal Rate of Retom $($expressed to two deamal placos$)$ Your answer must include two net prosont valas calculabions $($using consecutive cost of captal rales$)$ and inserpotition

$(5$ marks$)$

$5\mathrm{.}2\mathrm{.}2$ Based on the IRR should the company considar purchasing the machine? Why?

$(1$ mark$)$

INFORMATION

KTC Lruled is oconsidering an ruesiment in a mactine that costs R$400000$ and would result in cash saungs of R $120000$ per year for five vears The company's coot of capital is $12\%$