SECTION A [30 MARKS] Answer ALL the questions in this section. QUESTION 1 (5 marks) 1.1 Information: Jumbo Ltd produces tables with a steady monthly demand of 24 000 units. Tables require a component that is acquired from the supplier at R50 per unit. The cost of placing an order is R12 per order and the holding cost is 10% of the unit purchase price. NB: Round off to the next whole number Required: Number of orders per year based on the economic order quantity. 1.2 (5 marks) Information: Rambo Producers has the following sales forecast for Line 1 Product for the first two months of 2022 January 30 000 units February 40 000 units Rambo Producers maintains an inventory, at the end of the month, equal to 20% of the budgeted sales of the following month Required: Determine the required number of units that should be produced during January 2022 QUESTION 2 Machine A Machine B Initial cost R100 000 R110 000 5 years 5 years Expected economic life Expected disposal/residual value Expected net cash inflows R10 000 0 R R End of: Year 1 34 000 33000 Year 2 27000 33 000 Year 3 32 000 33 000 33 000 Year 4 30 000 26000 Year 5 33 000 Depreciation per year 18 000 22000 The company estimates that its cost of capital is 14%. 2.1 (5 marks) Calculate the payback period for Machine A and B (answers must be expressed in years, months and days) 2.2 Calculate the accounting rate of return (on average investment) for Machine A (answer rounded off to 2 decimal places) (4 marks) 23 Calculate the net present value of each machine (round off amounts to the nearest Rand). (6 marks) 2.4 Calculate the internal rate of return for Machine B