Question 5 Use the information provided below to answer the following questions. Where applicable, use the present value tables provided in APPENDICES 1 and 2 that appear after Question 5. 5.1 Calculate the Payback Period of Project A (expressed in years and months). (3 marks) 5.2 Calculate the Accounting Rate of Return (on average investment) of Project B (expressed to two decimal places). (5 marks) 5.3 Calculate the Net Present Value of each project. (Round off amounts to the nearest Rand.) (6 marks) 5.4 Based on your answers from question 5.3, which project should be chosen? Explain why. (1 marks) 5.5 Calculate the Internal Rate of Return of Project A (expressed to two decimal places). (5 marks) INFORMATION Hampshire Limited has the option to invest in machinery in Project A and Project B but finance is only available to invest in one of them. The initial cost of each project is R600 000. You are given the following projected data: PROJECT A Annual net profit (loss): R Year 1 20 000 Year 2 40 000 Year 3 60 000 Year 4 80 000 Year 5 (10 000) PROJECT B Annual net cash inflows: R Year 1 160 000 Year 2 160 000 Year 3 160 000 Year 4 160 000 Year 5 160 000