REQUIREDCalculate the following from the information given below:4.1.1 Payback Period (expressed in years, months and days).4.1.2 Accounting Rate of Return on initial investment (expressed to two decimal places).4.1.3 Internal Rate of Return (expressed to two decimal places) if the net cash inflows are R400 000per year for five years. Your answer must include two net present value calculations (usingconsecutive rates/percentages) and interpolation.INFORMATIONVRH Ltd is considering the purchase of Machine X, details of which are provided below:Initial investmentNet cash inflows:YearR0(1 500 000)1480 0002600 0003380 0004272 0005360 000The cost of capital is 12%. Depreciation is calculated using the straight-line method. No scrap value isexpected for the machine. Ignore taxes.

Part 2: ExplanationStep 1: Calculate the Payback PeriodThe Payback Period is the time it takes for…

Answered: REQUIRED Calculate the following from…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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