(Solved): QUESTION THREE [25] Ista Ltd has the option to invest in machinery in projects A and B but finance i ...

QUESTION THREE [25] Ista Ltd has the option to invest in machinery in projects A and B but finance is only available to invest in one of them. You are given the following projected data: Project A (R) Project B (R) Initial cost 450000 450000 Net profit: Year 1 36000 69000 Year 2 75000 69000 Year 3 102000 69000 Year 4 129000 69000 Year 5 81000 69000 Additional information: All cash flows take place at the end of the year except the original investment in the project which takes place at the beginning of the project. Project A machinery will be disposed of at the end of year 5 with a scrap value of R60 000 . Project B machinery