2.3 Comment briefly but meaningfully on the following ratios: 2022 2021 2.3.1 Acid test ratio 2.3.2...

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2.3 Comment briefly but meaningfully on the following ratios: 2022 2021 2.3.1 Acid test ratio 2.3.2 Return on equity 4.19:1 5.53:1 (2 marks) 12.08% 8.85% (2 marks) QUESTION 3 REQUIRED (25 Marks) Refer to the proposed acquisition of a new machine for purchase and installation during the second quarter of 2024 and answer the following questions: 3.1 Calculate the Payback Period (expressed in years, months and days) (3 marks) 3.2 Calculate the Accounting Rate of Return on initial investment (expressed to two decimal places). (4 marks) 3.3 Calculate the Internal Rate of Return (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. (6 marks) 3.4 Calculate the Net Present Value if the machine is expected to have a scrap value of R300 000. (6 marks) 3.5 Suppose Capri Ltd funds the purchase of the new machine through the issue of 12% preference shares that are expected to sell for R10 each. If the floatation costs are estimated at R1 per share, calculate the cost of the preference shares (expressed to two decimal places). (3 marks) 3.6 Suppose Capri Ltd funds the purchase of the new machine through the issue of ordinary shares. Assume that the present value of an ordinary share of Capri Ltd is R17.25, the next projected dividend is R1.80 per share and the expected growth rate in dividends is 15% p.a. Use the Gordon Growth Model to estimate the cost of the ordinary shares (expressed to two decimal places). (3 marks) 2.3 Comment briefly but meaningfully on the following ratios: 2022 2021 2.3.1 Acid test ratio 2.3.2 Return on equity 4.19:1 5.53:1 (2 marks) 12.08% 8.85% (2 marks) QUESTION 3 REQUIRED (25 Marks) Refer to the proposed acquisition of a new machine for purchase and installation during the second quarter of 2024 and answer the following questions: 3.1 Calculate the Payback Period (expressed in years, months and days) (3 marks) 3.2 Calculate the Accounting Rate of Return on initial investment (expressed to two decimal places). (4 marks) 3.3 Calculate the Internal Rate of Return (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. (6 marks) 3.4 Calculate the Net Present Value if the machine is expected to have a scrap value of R300 000. (6 marks) 3.5 Suppose Capri Ltd funds the purchase of the new machine through the issue of 12% preference shares that are expected to sell for R10 each. If the floatation costs are estimated at R1 per share, calculate the cost of the preference shares (expressed to two decimal places). (3 marks) 3.6 Suppose Capri Ltd funds the purchase of the new machine through the issue of ordinary shares. Assume that the present value of an ordinary share of Capri Ltd is R17.25, the next projected dividend is R1.80 per share and the expected growth rate in dividends is 15% p.a. Use the Gordon Growth Model to estimate the cost of the ordinary shares (expressed to two decimal places). (3 marks)