REQUIRED Study the information given below and answer the following questions: 5.1 Calculate the Payback Period of Project A (expressed in years, months and days). Calculate the Accounting Rate of Return on average investment of Project A (expressed to two decimal places). 5.2 5.3 5.4 5.5 Calculate the Benefit Cost Ratio of both projects (expressed to two decimal places). Refer to yours answers in question 5.3. Which project should be chosen? Why? Calculate the Internal Rate of Retum of Project B (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation Initial cost Expected useful life Expected scrap value Depreciation per year Expected net profit: End of year 1 2 3 4 5 INFORMATION The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be chosen. The company estimates that its cost of capital is 12%. Ignore taxes. Project A R900 000 5 years R100 000 R160 000 (3 marks) R 100 000 140 000 150 000 120 000 50 000 (4 marks) (7 marks) (1 mark) (5 marks) Project B R900 000 5 years 0 R180 000 R 90 000 90 000 90 000 90 000 90 000 F

REQWIRED Study the nilormaton given below and answer the folowing questions: 5.1 Calculate the Paybnck Period of Project A (expressed in years, montins and days) (3 marks) 5.2. Calcuble the Accounting Rate of Retum on avwige imestnent of Pryject A (expessed fo two decinal places) 5.3. Galculate the Benpli Cost Raso of both pocyects (expressed to two decimal places) (4 marhs) 5.4 Refer to yours answers in question 5.3. Which proect should be chosen? Why? ( 7 marks) 5.5 Carculsto the hintemat Rate of Rctum of Prgect 8 (expressed to two decimal places). Your (f mark) answer must indede two net present vale calculations pising consecutive ratespercentoges) and interpolation! ( 5 maris) INFORAATION The following informason relates to two capial expendilure projocts. Because of captal rasoning, only one peciect can be chosen. The eomyany mimates that id aed of captal is 125 . hrove takex