QUESTION 1 (25 Marks) 1.1 Your parents set up a trust fund for you 22 years ago that is now worth R47 866,34. If the fund earned 8% per year, how much did your parents invest? (5) 1.2 Suppose you are offered an investment that will allow you to double your money in 9 years. You have R20 000 to invest. What is the implied rate of interest? (7) 1.3 Suppose you have a 4-year-old son and you want to provide R55 000 in 16 years towards his college education. You currently have R5 000 to invest. What interest rate must you earn to have the R55 000 when you need it? (7) 1.4 Suppose you want to buy a new house. You currently have R30 000 and you figure you need to have a 10% down payment plus an additional 5% of the loan amount in closing costs. If the type of house you want costs about R450 000 and you can earn 7.5% per year, how long will it be before you have enough money for the down payment and closing costs? (6) QUESTION 2 (25 Marks) Pearl Limited is considering upgrading its plant to expand it client base. The financial details of the investment proposal are as follows: Cost of plant R4 700 000 Import duty R 900 000 Installation cost R 450 000 Net cash flows Year 1-8 R1 700 000 per annum (excluding residual value) Residual/scrap value R1 300 000 The company uses straight-line depreciation. The cost of capital for projects of similar risk is 18%. Ignore taxation. Required: 2.1 Calculate the investments Accounting Rate of Return (ARR). (5) 2.2 Briefly explain if the ARR is acceptable or not based on a target rate of return of 25%. (2) 2.3 Assume a payback period of 3 years. Determine the payback period and state if the investment is acceptable or not. (5) 2.4 Calculate and comment on the viability of the proposed investment based on the net present value (NPV) method. (8) 2.5 Discuss whether the advantages of using the NPV method outweigh the disadvantages. (5) QUESTION 3 (25 Marks) 3.1 REQUIRED Calculate the following: 3.1.1 Break-even quantity. (5) 3.1.2 Break-even value using the marginal income ratio. (4) 3.1.3 Margin of safety (in terms of units). (4) 3.1.4 Expected total marginal income and net profit. (5) INFORMATION Sammy Ltd manufactures calculators. The following information was extracted from the budget for the year ended 31 December 2023: Sales Selling price per calculator Variable production cost per unit Fixed production costs Variable selling and administrative costs per unit Fixed selling and administrative costs 10 400 units R350 R216 R154 000 R29 R82 000 3.2.Required Calculate the following from the information provided below: 3.2.1.Net profit or loss (3) 3.2.2.The number of units that must be sold to obtain a profit of R1 000 000. (4) INFORMATION The following projected figures were obtained from Drake Traders: R Sales (50 000 units @ R24) 1 200 000 Variable cost 280 000 Fixed cost 88 600 QUESTION 4 (25 Marks) 4.1REQUIRED Use the information provided to calculate and comment on the following ratios for 2023. Where relevant, round off answers to two decimal places. 4.1.1 Current ratio (4) 4.1.2 Acid test ratio (4) 4.1.3 Inventory turnover (4) 4.1.4 Debtor collection period (4) 4.1.5 Creditor payment period (4) INFORMATION Extracts of the financial statements of Sani-Tech Limited for 2023 are provided below. Sani- Tech Limited Extract of Statement of Comprehensive Income for the year ended 28 February 2023 R Sales (70% of sales on credit) 355 000 Cost of sales 215 000 Opening inventory 71 500 Purchases (all credit) 230 000 301 500 Closing inventory (86 500) Extract of Statement of Financial Position as at 28 February 2023 R Current assets 220 500 Inventories 86 500 Account receivables 50 000 Cash and cash equivalents 84 000 Current liabilities 68 350 Accounts payable 47 500 Other liabilities 20 850 4.2 You have been recently appointed as the Accounting officer for Casio Enterprises. You have been tasked with addressing the high level of delinquent accounts on the books. Explain FIVE (5) ways to collect overdue accounts. (5