QUESTION 5 Nole: Where applicable, use the present value tables provided in APPENDICES 1 and 2 that appear after the formula shert. REQUIRED Use the inlomation provided below to ancuer the folowing questions (eqrested to two decinal places). (4 maks) 5.3. Based on the Net Present Value, which allemafive should be chosen? Why? (Show the calculations of the present valus as wel as the net present values.) (8 makk) \$.4 Cakulate the Intemal Rate of Retum (expresed to wo decimal places) of the first altemative. Your answer must include two net present value calculations (using consecutie rates/percentages) and interpolation. (5 makis) NFORMATION The management of Togga Limited is considering two investment cpportunities: The first altemative involves the purchase of new machinery for R1 200000 which wil enable the company to modemise its production facility. The machinery is expected b have a useful life of five years and no salvage value is arficipated. On the day Torga Limted purchases the new machinery, it would also pay the supplier R60 000 for installation costs. The modernisation is expected to increase efficlency, resulting in a reduction in annual cesh operating expenses of R3 60000 , The second alternative involves purchasing a truck. The truck costs R1 200 000. Its useful life is expected to be five years and a salvage value of R300000 is anficipaled. Operating the truck will necessitate an increase of R60 000 in the company's working capital base immediately upon buying the truck. The working capital cash outlow is expected to be resovered at the end of the truck's useful life. The truck is expected to generate R730 000 per year in additional cash revenue5. The driver's salary and other cash operating expenses are expectid to be R950 000 per year. Torga Limiled desires a rate of retum of 12%. The straight-line method of depreciation is used. Ignore taxes