SECTION A [100 MARKS] Answer ALL the questions in this section. QUESTION ONE Your parents set up a trust fund for you 11 years ago that is now worth R25 786,51. If the fund earned 9% per year, how much did your parents invest? 1.1 (5 marks) Suppose you are offered an investment that will allow you to double your money in 11 years. You have R15 000 to invest. What is the implied rate of interest? 1.2 (7 marks) Suppose you have a 1-year old son and you want to provide R92 000 in 18 years towards his college education. You currently have R11 000 to invest. What interest rate must you earn to have the R75 000 when you need it? 1.3 (7 marks) Suppose you want to buy a new house. You currently have R15 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 R150 000 and you can earn 9.2% per year, how long will it be before you have enough money for the down payment and closing costs? 1.4 (6 marks) QUESTION TWO 2.1Use the information given below to calculate the net wage of M, Rashford for the last week of June 2022 (5 marks) INFORMATION M, Rashford is employed by United Enterprises. The normal working week is 42 hours. M, Rashford worked for 49 hours during the last week of June 2022. He is remunerated at R78 per hour during normal working hours. Overtime is calculated at 2 times the normal rate. The following are his deductions for the week: Medical aid fund R420 Pension fund 9% of the normal wages Income tax R920 United Enterprises contributes the same amount as the employees towards the medical aid fund and pension fund. 2.2 Calculate the value of closing inventory on 31 January 2023 using the: The following transactions of Mia Limited took place during January 2023 in respect of a component XYZ used in production: Jan 01 08 12 15 18 25 27 Stock of component XYZ on hand Issued to production Purchased from supplier Returned to supplier (purchased on 12 January 2022) Issued to production Purchased from supplier Issued to production 300 units @ R48 per unit 220 units 400 units @ R50 per unit 60 units 340 units 280 units @ R52 per unit 260 units 2.2.1 First-in-first-out (FIFO) method (10 marks) 2.2.2 Weighted Average Cost Method (10 marks) QUESTION THREE As a financial manager of Drak Enterprises, you are required to analyse two proposed capital investments, Projects Sun and Moon. Each has a cost of R100 000, and the cost of capital for each project is 12%. Depreciation on each project is estimated at R25 000 per year. The projects expected profit are as follows: Project Sun Project Moon Year 1 R40 000 R10 000 2 R5 000 R10 000 3 R5 000 R10 000 4 (R15 000) R10 000 3.1 Calculate the payback period for each project (In years, months and days). (9 marks) 3.2 Calculate the NPV for each project (9 marks) 3.3 Which project or projects should be accepted if they are independent? (2 marks) 3.4 Calculate the ARR for Project Sun. (5 marks) QUESTION FOUR INFORMATION Marie Manufacturers plans to start Project Marie and the following information is applicable to the project for the first financial year: Estimated sales for the financial year Selling price per unit Variable manufacturing costs per unit Fixed manufacturing overheads Fixed selling and administrative expenses Variable selling and administrative expenses per unit 3 500 units R4 000 R2 700 R1 400 000 R600 000 R300 REQUIRED Use the information provided below to calculate the following: 4.1 Calculate Break-even quantity (6 marks) 4.2 Calculate Break-even value (3 marks) 4.3 Calculate the Expected total Marginal income and Net profit/loss. (5 marks) 4.4 Answer each of the following questions independently: (5 marks) Calculate the number units required to break-even if: 1. the selling price is reduced by R400, and 2. variable selling and administrative expenses are adjusted to 8% of sales. 4.5 Answer each question independently (6 marks) Suppose Marie Manufacturers wants to make provision for an increase of R70 800 in fixed manufacturing overheads and a decrease in variable manufacturing costs of R240 per unit. Taking these changes into account, calculate the new break-even value.