Want to invest in a loader for $2,400,000nand use it as a contract, with an expected income ofn$920,000nper year andn$420,000nper year from the cost of using the loader if the salvage value of the backhoe loader is 5 Year Approximatelyn$1,000,000n

Find the rate of return of this project.

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Question 4 20 Marks Company X and Company Y are considering a merger. As part of the merger, Company Y is exchange one-for-one basis its shares of company X. The exchange ratio is based on the market prices of Company X and Company Y. The market data of the two companies are provided below: Market Data Net income (R) Shares outstanding Earnings per share (R) P/E Ratio Market price (R) 4.1. 4.2. 4.3. Company X 45 000 8 000 5.5 9 46 Company Y 65 000 2 000 3.5 15 46 Differentiate between business takeover and merging, also provide South African examples with justification for your answers. (6) Justify the wealth maximization rationale for using merger and acquisition as drivers? Based on the above data, should Company X and Company Y merge? (10) Question 4 20 Marks Company X and Company Y are considering a merger. As part of the merger, Company Y is exchange one-for-one basis its shares of company X. The exchange ratio is based on the market prices of Company X and Company Y. The market data of the two companies are provided below: Market Data Net income (R) Shares outstanding Earnings per share (R) P/E Ratio Market price (R) 4.1. 4.2. 4.3. Company X 45 000 8 000 5.5 9 46 Company Y 65 000 2 000 3.5 15 46 Differentiate between business takeover and merging, also provide South African examples with justification for your answers. (6) Justify the wealth maximization rationale for using merger and acquisition as drivers? Based on the above data, should Company X and Company Y merge? (10)

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