REQUIRED

Study the information provided below and calculate the following:

$5\mathrm{.}1$ Payback Period of both projects $($expressed in years, months and days$).$

$5\mathrm{.}2$ Accounting Rate of Return on average investment of Project A $($expressed to two decimal

places$).$

$5\mathrm{.}3$ Net Present Value of both projects. Your answer must include the calculations of the

present values and NPV$.$

$5\mathrm{.}4$ Internal Rate of Return of Project B $($expressed to two decimal places$).$ Your answer must

include two net present value calculations $($using consecutive rates$/$percentages$)$ and

interpolation.

INFORMATION

The following information relates to two capital investment projects that are under consideration by Alpha

Limited.

Project A Project B

Initial cost R$600000$ R$600000$

Expected life $5$ years $5$ years

Scrap value $00$

Expected net profit: R R

Year $18000070000$

Year $27000070000$

Year $36000070000$

Year $45000070000$

Year $54000070000$

The company estimates that its cost of capital is $12\%.$ The straight$-$line method of depreciation is used.

Ignore taxes.