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QUESTION 3 Isipingo Sweets Ltd is considering the possibility of investing in a new mixer....

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Accounting

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QUESTION 3 Isipingo Sweets Ltd is considering the possibility of investing in a new mixer. The following information is extracted from the reports of the project. Cost of investment Residual value Depreciation method Cost of capital Additional information: Year 234 CAPITAL INVESTMENT DECISIONS 1234 Profit Rand 34 30 000 40 000 60 000 R320 000 Nil Required: Answer the following questions: Straight-line 12% 3.1 Calculate the Accounting rate of return (two decimal places). 32 Calculate the payback period (in years, months and days). Calculate the net present value. Will the project be accepted? Why? Cash flow Rand 110 000 120 000 130 000 140 000 (20 Marks) (4 marks) marks) (8 marks) (2 marks)

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