Question: fAPPENDIX 2 : PRESENT VALUE OF A REGULAR ANNUITY OF R1 PER PERIOD FDR N PERIODS M10111! at 195 256 37'. 496 5% 575 754

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\fAPPENDIX 2 : PRESENT VALUE OF A REGULAR ANNUITY OF R1 PER PERIOD FDR N PERIODS M10111! at 195 256 37'. 496 5% 575 754 545 954 109'. 1154 1151 1191 1451 1595 15% 179i 156 1945 1071 Pain: 1 09901 0.9504 0.9109 0.9815 0.9524 0.9434 09145 09259 0.9174 09091 0.9009 0.579 0 81150 08772 0.8695 0 5121 0.8541 11.5475 0.84111 0 8331 2 19704 1.9415 1 9115 1 5551 1 21594 1.5334 1 80110 1.71131 1 1591 1.7155 1 7115 1.19111 1 59111 1.5457 1 5157 1.5052 1.5852 1 5555 15455 1 5175 1 29410 25539 211286 2 1151 17211 25730 16241 2.971 15113 2.41169 1 4411 2.411111 1 1611 23216 1 2811 21459 22006 21143 21399 11055 4 19020 3 5077 1 '7111 3 5279 354151 1.4551 1 1811 13121 1 2197 1.1699 3 1014 10371 19745 29137 1 11550 2 79m 2.7412 2 5901 2.53116 1 5551 5 411534 471.15 45197 44518 43295 41124 41001 39927 38597 1.7908 3 6959 1.51148 3 5171 3.4331 3 3521 32143 31991 31272 1.11576 1 9908 6 5.7955 5.5014 5.4111 5.1411 5.0157 4.9171 4.7655 4.523 4.4559 4.4551 41305 3.9975 3.5887 3.7845 3 5847 35891 3.4975 3.4098 3.4755 7 5.7287. 5.4770 6.7301 5.0021 5.7864 5.5824 5.3893 52064 5.0110 419684 4.7121 4 4D5 4.2883 4.1604 40385 39114 3.5115 3.7051 3 5146 8 7.5511 7.1155 7.0191 5.7127 5.4611 5.11578 59113 5.7456 5.5145 5.4349 5.1441 4 7985 4.5389 4.4873 4.1435 42111 4.0775 39544 3 ran 9 85650 8 1512 7 7861 7 4353 7 1015 6.5011 5 5151 62459 59951 5.7990 5 5110 5.1117 4.9454 4 7715 4 5055 4.4506 4.1018 4.1541 4 0310 10 94711 89551 85102 8 1109 7 7217 7.1501 7 0215 6.1101 5 4117 0.1446 5 I91 5 4262 51151 5 0185 4 5332 45586 44941 433119 41915 11 10.3576 9.7558 9.316 8.75115 5.3064 7.5869 7.4957 7.1390 5.8051 6.4951 5.2055 5.9377 5 6859 5.4527 5.7337 50155 4.8164 4.5550 4.4855 4 3171 12 112551 10.5751 9.9540 93551 5.8613 8.1838 7.9427 7.5351 7.1607 5.8111 5.4914 6.1944 5 9175 5.5503 5.4105 5 1971 49884 4.79.12 4.5105 4 4391 13 12.1311 11.1484 10.6150 9.9855 9.3915 8.8527 5.3577 7.9038 7.4559 7.1014 5.7499 6.4275 5 1215 5.5424 5.5831 5.123 5.1183 49095 4.7141 4 5327 14 13.15111 12 1062 112961 15 5531 91198.5 9.2150 5 1455 82442 7 1551 73657 5 9519 6.52112 5 307.5 5111121 5 7245 54575 52291 50051 410m 4 6105 15 1111551 12 5513 11 9119 11 1184 10 1197 9.7122 9 1019 85595 5 0507 715161 7 1909 6.51119 5 4624 51422 5 8474 5.5755 53242 50915 411759 4 6755 15 14.7119 13.5777 12.5611 11.5573 10.8175 10.1099 9.4455 8.8514 5.1115 7.8211 73791 6.9740 5 6039 52551 5.9542 5.5585 5.4055 5.1524 4.9371 4 7295 17 15.5511 14.2919 13.1661 12.1557 11.2141 10.4711 9.7671 9.1216 5.5435 8.11216 7.5485 1.1196 0 131 53729 8.0471 5 7487 5.4146 5.2113 4.0191 4 7745 18 163981 14.9920 13.7515 12.5593 11.6895 10.8276 10.0591 9.3719 5.1555 8.1014 7.1015 1.2491 5 8399 6.4574 5.1280 5 5178 55119 517.12 5.0051 4 8122 19 172260 15.5785 14.3118 13.1139 11.0853 11.1581 103155 9.5136 5.9501 8.3649 7.8191 1.3558 5 9380 55504 8.1982 5 5775 55845 5.1152 5.07111 4 8435 20 1811456 153514 148715 13 5903 11 4611 1141199 10 5940 9.8181 9 1155 85116 7 9511 1.4594 1 0045 55731 5 7593 5 9188 5.5118 5.1527 5.10119 4 81595 15 22.0732 19.57.15 17.4111 15.5221 14.0979 12.7834 11.6515 10.6748 9.8115 9.11710 5.4217 1.5431 13300 6.173 5.4641 6 0971 5.7661 5.4659 5.1951 49475 30 2511011 223955 1991104 171920 151115 11.7548 114090 1115111 10 2137 9.4209 5 $15 8min 1.4957 7.01127 5 5661 5 1172 511294 5 5158 52141 49759 40 12.8341 273555 23.1148 19.7928 17.1591 15.0410 1.13117 119246 10.1574 9.7791 5.9511 8.1438 7 6344 7.1050 8.6415 51335 5.5111 5.5451 52781 4 9955 50 39.1961 31.4215 25.7298 21.4522 15.2559 15.7519 13.8007 122715 109417 99148 9.0417 8.31145 7 6752 7.1327 5.5605 51453 531801 5.5541 52573 49995 50 449550 34 75119 276156 22 5215 15 9213 15.1614 14 0191 123766 11 0150 99611 9 0715 83240 1 6873 7.14111 5 5651 514112 5.8819 5 5553 52m 4 9999 REQUIRED Answer the questions based on the information supplied. 5.1 REQUIRED Use the information provided below to calculate the following. Where applicable, use the four-decimal present value tables provided in APPENDICES 1 and 2 that appear after QUESTION 5. 5.1.1 Accounting Rate of Return (on initial investment) of Machine A (expressed to two decimal places) (4) 5.1.2 Net Present Value of each machine (5) 5.1.3 Internal Rate of Return of Machine B (expressed to two decimal places) using interpolation. (5) INFORMATION Avery Manufacturers intends purchasing a new machine and has a choice between two machines viz. Machine A or Machine B. The cost of each machine is R3 000 000, with each having an expected useful life of five years. Machine A is expected to have a scrap value of R200 000. No scrap value is expected for Machine B. Avery Manufacturers uses the straight-line method of deprecation. The cost of capital is estimated at 16%. Machine A is expected to generate the following net profits over its useful life: Year 1 R340 000 Year 2 R280 000 Year 3 R550 000 Year 4 R340 000 Year 5 R160 000 Machine B is expected to generate a net profit of R340 000 per year over the five-year period. ignore taxes.\f

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