Additional InformationThe discount rate used by thecompany is 12%.5.2 Use the information providedbelow to calculate the InternalRate of Return (expressed to twodecimal places) usinginterpolation.INFORMATIONA machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year.The machine is expected to have a useful life of four years.APPENDIX 1: PRESENT VALUE OFR1NumberdPeric12341% 25% 4% 5% 6%2%7%E125 14%15%4.390103604 1.5709 9615 09634 09434 03346 01210 4.9124 000 0.0009 08529 0.8850 08772 0858686.853 08417 08364 08116 076/207831 8.7006 635610.0003 03612 1.5416 :124609070 08500 0.873405/06 03423 89151 08800 08438 03396 0.3153 47900 67722 67513 67312 07118 06931 16750 86575 0680E18% 135 20% 2554130833320344003456go09610 03848885 08548 08127 07621 0.7629 47310 47084 05830 4.6587 06315 06133 5021 45718 05523 05337 4.556 046704123 04096 Use the following informationprovided to answer the questionbelow:INFORMATIONZeda Enterprises has the option toinvest in machinery in projects Aand B but finance is only availableto invest in one of them. You argiven the following projecteddata:Initial costScrap valueDepreciation per yearNet profitYear 1Year 2Year 3Year 4Year 5Net cash flowsYear 1Year 2Year 3Year 4Year 5Project AR300 000R40 000R52 000R20 000R30 000R50 000R60 000R10 000Project BR300 0000R60 000R90 000R90 000R90 000R90 000R90 000

Internal Rate of Return is a techniques in Capital Budgeting through which we can know the actual…

Additional Information The discount rate used by the company is 12%. 5.2 Use the information provided below to calculate the Internal Rate of Return (expressed to two decimal places) using interpolation. INFORMATION A machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year. The machine is expected to have a useful life of four years. APPENDIX 1: PRESENT VALUE OF R1 Number Parke 1 2 3 4 1525 15 00423 € 4% 6% 7% IN P% 10% 11% 12% 125 145 15% 10% 17% 18% 10% 20% 401 05604 1.52099615 09636 00434 03346 01210 4.9134 0000 0000 08029 08850 0.8772 08 0.0003 03412 4.541661246 09970 0893008734 4453 08417 08486 0782 6781 1.096 616 151 cas0 083 0820684163 4.790 67722 67513 67312 07118 08931 16750 64575 0680 49610 03 885 08548 08127 07621 47620 473108704 05430 4.6587 04315 06133 021 65718 05523 05337 45 408333 DOM 003456 LAW 04123 € 04004 go

Additional Information The discount rate used by the company is 12%. 5.2 Use the information provided below to calculate the Internal Rate of Return (expressed to two decimal places) using interpolation. INFORMATION A machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year. The machine is expected to have a useful life of four years. APPENDIX 1: PRESENT VALUE OF R1 Number Parke 1 2 3 4 1525 15 00423 € 4% 6% 7% IN P% 10% 11% 12% 125 145 15% 10% 17% 18% 10% 20% 401 05604 1.52099615 09636 00434 03346 01210 4.9134 0000 0000 08029 08850 0.8772 08 0.0003 03412 4.541661246 09970 0893008734 4453 08417 08486 0782 6781 1.096 616 151 cas0 083 0820684163 4.790 67722 67513 67312 07118 08931 16750 64575 0680 49610 03 885 08548 08127 07621 47620 473108704 05430 4.6587 04315 06133 021 65718 05523 05337 45 408333 DOM 003456 LAW 04123 € 04004 go

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 4CMA

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