QUESTION 1 (5 MARKS)

Read the information provided below and calculate the following: 1.1 The Economic Order Quantity (3 marks) 1.2 The expected number of orders that will be placed (2 marks)

Information Kaymu Enterprises are in the business of selling files. The selling price of a file is R 20. The monthly demand for the files is 750 units. The ordering cost amounts to R 25 per order and the inventory holding cost is R 5 per unit.

QUESTION 2 (8 MARKS)

Study the following Pro-Forma Statement of Comprehensive Income of Dhikim Ltd for the month ending 28 February 2019.

You will be required to use the information provided to: 2.1 Calculate the following for February 2019. 2.1.1 Cost of Sales (1 mark) 2.1.2 Taxation (1 mark) 2.1.3 Profit after Taxation (1 mark) 2.2 Prepare the Pro-Forma Statement of Comprehensive Income for the month ending March 2019.

Note: use the format provided for February 2019 (5 marks) Information

Pro-Forma Statement of Comprehensive income of Dhikim Ltd for the month ending 28 February 2019

	R
Sales	400 000
Cost of sales	2.1.1
Gross Profit (25% of sales)	?
Operating Income	50 000
Operating expenses	(120 000)
Operating profit	?
Interest Income	27 000
Interest Expense	(14 000)
Profit before tax	?
Taxation (30%)	2.1.2
Profit after tax	2.1.3

Additional information - Sales is forecasted to increase by 10% in March 2019 - The Gross Margin for March 2019 remains unchanged from February 2019 - Operating Income and Operating Expenses for March 2019 will vary in proportion to sales from February 2019 (percentage of sales). - There was no change to interest receipts and payments for March 2019 from February 2019 - The tax rate remains the same for March 2019

QUESTION 3 (7 MARKS)

Study the information below and answer the questions that follow:

Information Zakiv Limited is considering investing in a project. The following information/data is available for the project:

Annual profits (loss): R	R
Year 1	(38 000)
Year 2	40 000
Year 3	(7 000)
Year 4	25 000
Year 5	34 000
Initial Cash Investment	300 000
Expected useful life 5 years	5 years
Scrap Value	20 000

The company estimates that its cost of capital is 10%. Required: 3.1 Calculate the Accounting Rate of Return for the project. (3 marks) 3.2 Calculate the Net Present Value for the project. (4 marks)