Have a look at the information given below and answer the following:

1. Do a calculate of the Payback Period of both projects (please answers expressed in years, months and days.) Which project would you choose on the basis of the payback period AND Why?

2. Do a calculation of the Accounting Rate of Return for both projects (express the answer to two decimal places).

3. Do a Calculation of the Net Present Value for both projects. (Round off amounts to the nearest Dollar.)

4. Now based on the calculations you have made from 2.1 2.3, which project should Vuyo Limited choose AND Why?

please see attached image of information that relates to the both projects considered by Vuyo limited

Project A R1 555 000 Project B R1 550 000 Initial cost 7 years 7 years Expected life Expected scrap value Expected net cash flows: 0 0 R R End of year 1 450 000 420 000 2 420 000 420 000 3 420 000 420 000 4 400 000 200 000 180 000 350 000 5 420 000 6 420 000 7 450 000 420 000 The company estimates that its cost of capital is 13%