Spier Ltd obtained the information below regarding Years Net cash inflow R 1 2 3 4...

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Spier Ltd obtained the information below regarding Years Net cash inflow R 1 2 3 4 400 000 320 000 250 000 180 000 1.2. 1.3. 1.4. a capital investment project it is considering Net profit Discount factor @ 12% R 260 000 200 000 160 000 100 000 The project has an initial cost of R900 000 with no scrap value. The cost of capital is 12%. 0.8929 0.7972 0.7118 0.6355 Required: Use the information below to answer the following questions: 1.1. Calculate the Payback Period (answers should be expressed in days, months and years) Calculate the Accounting Rate of Return, on average investment. Calculate the Net Present Value. Discuss the advantages and disadvantages of using the Net Present Value method to appraise a project. Spier Ltd obtained the information below regarding Years Net cash inflow R 1 2 3 4 400 000 320 000 250 000 180 000 1.2. 1.3. 1.4. a capital investment project it is considering Net profit Discount factor @ 12% R 260 000 200 000 160 000 100 000 The project has an initial cost of R900 000 with no scrap value. The cost of capital is 12%. 0.8929 0.7972 0.7118 0.6355 Required: Use the information below to answer the following questions: 1.1. Calculate the Payback Period (answers should be expressed in days, months and years) Calculate the Accounting Rate of Return, on average investment. Calculate the Net Present Value. Discuss the advantages and disadvantages of using the Net Present Value method to appraise a project.

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