QUESTION 5 REQUIRED Study the information provided below and answer the following questions. Calculate the Payback Period of Project A (expressed in years, months and days.) The payback period of Project B is 3 years, 0 months and 28 days. On the basis of payback period, which project should be chosen? Why? Calculate the Accounting Rate of Return (on average investment) of Project A (expressed to two decimal places). Calculate the Net Present Value of each project. Calculate the Internal Rate of Return of Project B (expressed to two decimal places) if the net cash flows are R126 000 per year for five years. INFORMATION The following information relates to two capital investment projects that are being considered by Senzo Ltd. Due to the availability of funds, only one of the projects may be chosen. Project A R400 000 Project B R400 000 5 years 5 years Nil Nil R80 000 15% R80 000 15% Initial cost Expected useful life Scrap value Depreciation per year Cost of capital Expected net profit: Year 1 Year 2 Year 3 Year 4 Year 5 R20 000 R50 000 R50 000 R50 000 R40 000 R80 000 R60 000 R30 000 R50 000 R50 000