QUESTION 3 REQUIRED Study the information provided below and calculate the following: 3.1 Payback period of Project A (answer expressed in years, months and days). 3.2 Accounting Rate of Return (on average investment) of Project B (answer expressed to two decimal places). 3.3 Net Present Value of both projects (amounts rounded off to the nearest Rand). 3.4 Benefit Cost Ratio of Project A (answer expressed to three decimal places). 3.5 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATION The following information relates to two possible capital expenditure projects being considered by Edam Ltd. Because of capital rationing, only one project can be accepted. Initial cost Expected useful life Average annual profit Expected net cash inflows: Year 1 Year 2 Year 3 Year 4 Year 5 Project A R800 000 5 years R80 000 R 240 000 260 000 280 000 220 000 200 000 Project B R800 000 5 years R80 000 R 240 000 240 000 240 000 240 000 240 000 The company estimates that its cost of capital is 15%. NOTE: ALL ANSWERS MUST BE TYPED OUT AND WORKINGS MUST BE SHOWN