1.1 Here are some important figures from the budget of Nashville Nougat, Inc, for tha earand auarter of 2022: The company predicts that 3 per cent of its sales will never be collected, 36 per cent of its sales will be collected in the month of sale, and the remaining 61 per cent will be collected in the following month. Purchases will be paid in the month following the purchase. What is the net cash flow for April, May and June? (9) 3.8 What is the price of a 5 -year bond with a 6% coupon and a 7% YTM. The face value is R8m. 3.9 What is the price of a 10 -year bond that pays R20 000 every 6 months, has a YTM of 12%, and a par value of R 15m ? [24] QUESTION 4 4.1 Briefly explain and graphically illustrate the difference between a flexible short-term investment policy and a restrictive investment policy. (8) 4.2 Briefly explain the two types of inventory loans that can be used as short-term borrowing. (4) 4.3 The trust deed of the bond can indicate any call or put provisions on the bond. Briefly explain the difference between the two. 4.4 What are bond ratings? Keep M Flying is a section of Denel that stocks engine components and test equipment for the defence aircraft industry. A new customer has placed an order for eight highbypass turbine engines, which increase fuel economy. The variable cost is R1,7 million per unit, and the credit price is R2,1 million each. Based on historical experience, payment for about 1 out of every 240 such orders is never collected. The required return is 2,8 percent per period. 2.1 Should credit be extended for a one-time sale? 2.2 What is the breakeven default rate for a repeat sale? Your firm currently sells 130 units a month at a price of R210 a unit. You think you can increase your sales by an additional 50 units if you switch to a net 30credit policy. The monthly interest rate is 0,6 per cent and your variable cost per unit is R125. 2.3 What is the net present value of the proposed credit policy switch? [10] QUESTION 3 Calculate the correct answer: 3.1 An endowment policy will mature in 20 years' time and pay out R1,2m. How much is it worth today at a discount rate of 8% ? 3.2 At what rate should I invest R10 000 to triple my money over 10 years? 3.3 Which rate is the highest: 1% nominal return per month or 6% real return per year? The inflation rate is 6%. 3.4 When I go on retirement in 10 years' time, I will receive an annual pension of R480 000 for the rest of my life. How much is that worth today if the discount rate is 6% ? 3.5 I bought a car and financed it with a 10% per year compounded monthly loan 54 months. The monthly payment is R4 275 and a fon price of the car? (2) (2) is the 3.6 What is the monthly payment on a house of R780000 if financed at 12% over a period of 30 years? 5 , and currently sells for R8.6m