Question $3$

$(5$ marks$)$

Assume a compary has cost of equity of $13\%$ and ater$-$tax cost of debt of $7\mathrm{.}50\%.$ What is the neighbod$-$verage coss of capial $($WACC$)$ if the target debt$-$equity ratio is $25\%.$

Question $4$

$(80$ marks$)$

Takura $($Pty$)$ Ls $($Takuta$)$ is corsidering pucthasing equipmert that costs R$235000.$ The equipeent has an estmated ushath life of $5$ years and no salvage value. B Company believes that the amual cash infows from using the equipment will be R$65\mathrm{.}000.$

Required:

$4\mathrm{.}1$ Calcuase the net present value of the equpment asuing that Tacrals coas of caplal is $12$ s $.$ Is the equpnent an acceptable investment?

$42$ Cakuate tre net present value of the equipment aswuning fut $8$ Cormpanys cost of capea is tos is the equipment an acceptabie investment?

$(5)$

$(5)$

TME EMD