$5\mathrm{.}3$

REQUIRED

Use the information given below to answer the following questions

$5\mathrm{.}3\mathrm{.}1$ Calculate the Internal Rate of Petum $($expressed to two decimal places$).$ Your answer must include two net present value calculations $($using consecutive cost of capital rates$)$ and interpolation.

$(6)$ marks$)$

$5\mathrm{.}3\mathrm{.}2$ Based on the IRR should the compamy consider purchasing the machine? Why?

$(1$ mark$)$

INFORMATION

Venus Limiled is imestigating an opporfunily to purchase a machine for R $840$ c$00.$ The machine is expected generale net cash flow$5$ of R$180000$ per annum for five years. The company's cost of capial is $16\%.$