INFORMATION The management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, ea

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INFORMATION The management of Mastiff Enterprises has a choicebetween two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The followinginformation is presented to you: PROJECT COS PROJECT TAN Net ProfitNet Profit
Year 1 Net Profit 130 000 Net Profit 80 000
Year 2 Net Profit 130 000 Net Profit 180 000
Year 3 Net Profit 130 000 Net Profit 120 000
Year 4 Net Profit 130 000 Net Profit 220 000
Year 5 Net Profit 130 000 Net Profit 50 000
A scrap value of R100 000 is expected for Project Tan only. Therequired rate of return is 15%. Depreciation is calculated usingthe straight-line method. Use the information provided above tocalculate the following. Where applicable, use the present valuetables provided in APPENDICES 1 and 2 that appear after QUESTION5.
5.1 Payback Period of Project Tan (expressed in years, monthsand days). (3 marks)
5.2 Net Present Value of Project Tan. (4 marks)
5.3 Accounting Rate of Return on average investment of ProjectTan (expressed to two decimal places). (4 marks)
5.4 Benefit Cost Ratio of Project Cos (expressed to threedecimal places). (4 marks)
5.5 Internal Rate of Return of Project Cos (expressed to twodecimal places) USING INTERPOLATION. (5 marks)