CAPITAL BUDGETING TECHNIQUES The financial manager of EM Limited is required to analyse two proposed capital investments, namely Projects N and O. Each has a cost of R100 000, and the cost of capital...

Extracted text: CAPITAL BUDGETING TECHNIQUES The financial manager of EM Limited is required to analyse two proposed capital investments, namely Projects N and O. Each has a cost of R100 000, and the cost of capital for each project is 12%. Depreciation on each project is estimated at R25 000 per year. The projects expected net profit (loss) are as follows: Year Project N Project O 1 R40 000 R10 000 R5 000 R10 000 R5 000 R10 000 4. (R15 000) R10 000 Questions: (4 1.1 Calculate the payback period for each project. 1.2 Calculate the net present value for each project. 1.3 Determine which project should be chosen based on 1.2 1.4 Calculate the internal rate of return for project N.