Answer ALL questions. QUESTION ONE (25 Marks) The following information relates to three possible capital expenditure projects. Because of capital rationing, only one project can be accepted. Project R400 000 Project Y R460 000 Initial cost Expected life Expected scrap value Expected net cash inflows: Project Z R360 000 4 years nil 5 years 5 years R20 000 R R30 000 R End of year 200 000 2 160 000 140 000 130 000 120 000 110 000 140 000 100 000 110 000 65 000 95 000 100 000 3 4 100 000 5 100 000 The company estimates its cost of capital is 18%. Required 1.1 Calculate the payback period for project Y. (Answer must be expressed in years and months) 1.2 Calculate the accounting rate of return for project Z. (Answer expressed to 2 decimal places) 1.3 Calculate the net present value of each project. (Round off amounts to the nearest Rand) 1.4 Using the answers from question 1.3, which project should be chosen? Explain why. (6) (12) (3)