Question: Please help, it's urgent. QUESTION 2 Machine A Machine B R100 000 Initial cost R110 000 5 years 5 years 0 R10 000 Expected economic

 Please help, it's urgent. QUESTION 2 Machine A Machine B R100

Please help, it's urgent.

QUESTION 2 Machine A Machine B R100 000 Initial cost R110 000 5 years 5 years 0 R10 000 Expected economic life Expected disposal/residual value Expected net cash inflows R R 33 000 34 000 End of: Year 1 27 000 33 000 Year 2 32 000 33 000 Year 3 30 000 33 000 Year 4 26 000 33 000 Year 5 18 000 22 000 Depreciation per year The company estimates that its cost of capital is 14%. (5 marks) 2.1 Calculate the payback period for Machine A and B (answers must be expressed in years, months and days) (4 marks) 2.2 Calculate the accounting rate of return (on average investment) for Machine A. (answer rounded off to 2 decimal places)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!