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Note: Where applicable, use the present value tables provided in APPENDICES $1$ and $2$ that appear after QUESTION $5.$ REQUIRED Use the information provided below to answer the following questions: $5\mathrm{.}1$ Calculate the Payback Period of Machine A $($expressed in years, months and days.$)5\mathrm{.}2$ Calculate the Accounting Rate of Return on average investment of Machine A $($expressed to two decimal places$).5\mathrm{.}3$ Calculate the Net Present Value $($NPV$)$ of both machines. $5\mathrm{.}4$ Based on the Net Present Value, which machine should Aspen Limited purchase? Why? $5\mathrm{.}5$ Calculate the Internal Rate of Return $($IRR$)$ of Machine B $($expressed to two decimal places$).$QUESTION $4$

$(20$ Marks$)$

REQUIRED

Use the information providad below to answer the following questions:

$4\mathrm{.}1$ Calculate the weighted average cost of capital $($calculations expressed to two decimal placas, where

applicabla$).(16$ marks$)$

$4\mathrm{.}2$ Calculate the cost of equity using the Gordon Growth Model $($expressed to two decimal placas$).(4$ marks$)$

INFORMATION

Capri Limited intends raising finance for a proposed new projact. The financial manager has provided the

following information to determine the present cost of capital to the company:

The capital structure consists of the following:

$2$ milion ordinary shares issued at R$2$ each but currently trading at R$3$ each. The company's beta coefficient

is $1\mathrm{.}4.$ The risk$-$free rate is $9\%.$ The return on the market is $17\%.$

$1$ milion $12\%,$ R$2$ preference shares with a market value of R$3$ per share.

R$100000020\%$ Bank loan, due in January $2026.$

Additional information

The Capital Assat Pricing Model is used to determine the cost of equity.

A dividand growth of $10\%$ per annum on ordinary shares was maintained over the past five years. The latest

dividend paid was $80$ cents per share.

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