4.1 (a) 4.2 (b) The questions are as follows: 4.1 The cost of financing trade accounts changes when discounts are offered. From the options below, select the rule of when to take up the discount that is offered by the supplier. (a) The cost should be compared to the cost of other long-term financing sources. (b) The nominal annual percentage cost equation should not take the effect of compounding into account. (c) The effective cost of discount forgone should be weighed against the organisation's regular cost of short-term funding. If the overdraft rate is lower than the effective cost of the discount foregone, the discount should be taken, but when the overdraft rate is higher it is not cost effective to take the discount. (d) If the organisation's regular cost of short-term funding (such as the overdraft rate) is lower, it is not cost-effective to take the discount. (2) 4.2 Apply your knowledge about capital budgeting to select the combination of the following statements that are all TRUE. (1) Capital budgeting decisions determines how the organisation will commit its scarce and valuable capital resources in the short term. (2) It is the formal process that an organisation uses for the acquisition and investment of capital. (3) Capital budgeting also involves the decisions of the organisation to invest its current funds for additions to, modifications as well as replacement of long-term assets. (4) Capital budgeting provides methods by which capital investments are evaluated regarding the profitability and acceptable return of the funds that will be invested in assets/fixed productive projects. a) Statements (1), (2) and (3) b) Statements (2), (3) and (4) c) Statements (1) and (4) d) Statements (1) and (3) (2) MAC2602 ASSESSMENT THREE(3) S1-2023 4.3 Identify which ONE of the examples of capital expenditure below will be classified as major repair or upgrade. (a) A-Z paint distributers uses machine Divine-Mix in their production process. This machine broke down and the company consulted the supplier of the machine to service it. The suppliers of the machine inspected the machine and stated that machine DivineMix was severely damaged, possibly due to power surges that occurred each time that the energy supply switched to a generator during load-shedding. They suggested updating the machine with new technology that can run from A-Z paint distributo newly installed solar power system. This will restore it to its previous production out and capacity. (b) Power Xperts uses machine Alkaline in their battery manufacturing process. Management realises that this machine is nearing the end of its lifespan and will also become obsolete due to the increased demand for Lithium batteries. A similar machine that can manufacture Lithium batteries should be acquired in the place of machine Alkaline. (c) Zeeman Meat Wholesalers is experiencing a remarkable increase in demand for prepackaged beef and pork. The board of directors approved the acquisition of four new, hi-technology meat saws at their meat processing division to increase their production capacity