4 QUESTION 4 (20 Marks) 4.1 REQUIRED Calculate the following from the information provided below: 4.1.1 Economic Order Quantity (5 marks) 4.1.2 Re-order point (3 marks) INFORMATION The following details have been supplied by Embury Limited for one of its products: Annual sales 36 000 units Carrying costs as a percentage of the unit purchase price 10% Purchase price per unit R20 Cost of placing an order R10 Period between when an order is placed and when that order is delivered 12 days Number of days in the year that the company operates 240 4.2 REQUIRED Use the information given below to calculate the cost (as a percentage, expressed to two decimal places) to Samke Retailers of not accepting the cash discount. (Assume a 360-day year.) (4 marks) INFORMATION Brics Wholesalers offers Samke Retailers credit terms of 30 days but allows a discount of 2.5% if the account is settled in full within 12 days. 4.3 REQUIRED Use the information provided below to calculate the cost (as a percentage, expressed to two decimal places) of ordinary share financing, preference share financing and the loan. (8 marks) INFORMATION Gypsey Limited intends investing in a project and is considering using the following three sources of finance: Ordinary shares The market price of an ordinary share of Gypsey Limited is R20 and the total ordinary share capital is R1 000 000. The shares were initially sold for R16 each. The dividend per share at the end of the previous year was R3. The expected growth rate in dividends is 10%. The dividend growth model is used to estimate the cost of the ordinary shares. Preference shares Gypsey Limited intends issuing 12 000 15% preference shares at R21 per share. The cost of issuing the shares is estimated at R1 each. Long-term loan Gypsey Limited intends obtaining a long-term loan. The loan of R1 300 000 is expected to be obtained at an interest rate of 15%. The marginal tax rate of Gypsey Limited is 28%