(Solved): QUESTION 5 (20 Marks) Note: Where discount factors are required, use only the four decimals present ...

QUESTION 5 (20 Marks) Note: Where discount factors are required, use only the four decimals present value tables (Appendix 1 and 2) that appear after QUESTION 5. 5.1 REQUIRED Use the information given below to calculate the following: 5.1.1 Payback Period (expressed in years, months and days) (4 marks) 5.1.2 Accounting Rate of Return on average investment (expressed to two decimal places) (5 marks) 5.1.3 Net Present Value. (Your answer must include the calculations of the present values and NPV.) (4 marks) INFORMATION Esquire Limited intends purchasing a new machine and the following details relate to this machine: \begin{tabular}{|l|c|c|} \hline Purchase price & R1 000 000 & \\ \hline Expected useful life & 4 years & \\ \hline Scrap value (not included in the figures below) & R200 000 & \\ \hline Depreciation per year & R200 000 & \\ \hline Minimum required rate of retum & \( 15 \% \) & \\ \hline Expected net cash inflows and net profit: & Net cash flows & Net profit \\ \hline Year 1 & R300 000 & R100 000 \\ \hline Year 2 & R320 000 & R120 000 \\ \hline Year 3 & R370000 & R170 000 \\ \hline Year 4 & \( ? \) & R80 000 \\ \hline \end{tabular}