Question 3 (13 marks) The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be accepted. Initial cost Expected life Expected scrap value Expected net cash inflows: Project A R800 000 5 years R40 000 Project B R920 000 5 years R60 000 End of year 1 2 3 4 5 R 320 000 280 000 260 000 240 000 220 000 R 400 000 280 000 200 000 200 000 200 000 The company estimates its cost of capital is 12%. Depreciation is calculated using the straight-line method. Required 3.1 Calculate the payback period for project B. (Answer expressed in years and months) (10 marks) 3.2 Calculate the accounting rate of return for project A. (Answer expressed to 2 decimal places)