33 3.3 QUESTION 3 Answer the questions from the information provided. 3.1 Use the information provided below to calculate the following: Break-even value, using the contribution margin ratio Sales volume required to achieve an operating profit of R2 000 000 Total Contribution Margin and Operating Profit/Loss if Rinex Limited operates at 80% capacity INFORMATION Rinex Limited produces only one product. The forecasted production and sales are 50 000 units per year and the sales price is R200 per unit. The relevant budgeted unit costs for 2022 include direct materials R40, direct labour R48, variable manufacturing overheads R20 and sales commission R12. The fixed costs include manufacturing overheads R600 000, marketing expenses R200 000 and administrative expenses R240 000. 3.2 Use the Gordon growth model to estimate the cost of the ordinary shares of TRV Limited (expressed to two decimal places) from the information provided below. (4 marks) INFORMATION The present value of a TRV Limited ordinary share is R90. The next years' expected dividend is R7.20 per share and the expected growth rate in dividends is 12% p.a. Use the information provided below to calculate the weighted average cost of capital of MTV Limited (expressed to two decimal places). The optimal capital share of MTV Limited is 30% debt, 20% preference share and 50% ordinary share financing. The pre-tax costs of capital for debt, preference shares and ordinary shares are 18%, 10% and 20% respectively. The tax rate is 30%.