An investor places a sum of R100 000 in a US dollar denominated overseas fixed interest investment earning 6 p a compound for a one year, and repatriates the investment with the interest at the end of the year During the year period, the value of the Rand depreciates from R7, 01 per Dollar to R7,29 per Dollar Indicate whether this investment proves to be a better one than leaving the R100 000 in a local savings account earning 3 per annum, drawing on relevant calculations to support your argument (Ignore any tax and charges for the purposes of this exercise ) Question 2 (SO1 AC1) Sean intends to start his own business selling specialist wines Some of his sales will be for cash from a shop that he intends to rent He also plans to sell some wine on credit to local restaurants and hotels The details of his business plan are as follows He will rent a shop for R10, 000 per annum payable quarterly in advance The landlord also requires a deposit of R5, 000 to be paid when the rental starts in June He will invest R12, 000 from his own savings and his father will loan him R8, 000 His father will charge interest at a rate of 5 per annum payable annually after an interest free period of 6 months Sean will purchase and pay for R12, 000 of wine in June and thereafter To maintain that level of inventory, he will continuously purchase wine to replace what is sold Suppliers will allow one month's credit and credit customers will expect one month's credit Carey, Knowles Towers Clark Accounting A Smart Approach Chapter 1 The Cash Budget Practice questions Sales levels are predicted to be June July August September October November Total sales R 6,000 6,500 7,000 8,000 9,500 12,000 Cash sales R 3,000 3,000 3,000 3,500 4,500 5,000 Credit sales R 3,000 3,500 4,000 4,500 5,000 7,000 Wine will be sold at a gross profit margin of 20 Sean intends to withdraw R500 per month for his own use and will employ a part time assistant whom he will pay R400 per month Sean will need to purchase and install shelving that will be delivered and paid for at the beginning of June at a cost of R3,800 He will also lease a van at a cost of R450 per month Other anticipated costs are June 500 July 380 August 400 September 500 October 550 November 6000 REQUIRED help me prepare cash budget for Sean for his first 6 months' trading to 30 November

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An investor places a sum of R100 000 in a US dollar denominated overseas fixed interest investment earning 6% p.a. compound for a one-year, and

An investor places a sum of R100 000 in a US dollar denominated overseas fixed interest investment earning 6% p.a. compound for a one-year, and "repatriates" the investment with the interest at the end of the year.

During the year period, the value of the Rand depreciates from R7, 01 per Dollar to R7,29 per Dollar. Indicate whether this investment proves to be a better one than leaving the R100 000 in a local savings account earning 3% per annum, drawing on relevant calculations to support your argument.

(Ignore any tax and charges for the purposes of this exercise.)

Question 2 (SO1 AC1)

Sean intends to start his own business selling specialist wines. Some of his sales will be for cash from a shop that he intends to rent. He also plans to sell some wine on credit to local restaurants and hotels. The details of his business plan are as follows:

He will rent a shop for R10, 000 per annum payable quarterly in advance. The landlord also requires a deposit of R5, 000 to be paid when the rental starts in June.

He will invest R12, 000 from his own savings and his father will loan him R8, 000. His father will charge interest at a rate of 5% per annum payable annually after an interest free period of 6 months.

Sean will purchase and pay for R12, 000 of wine in June and thereafter. To maintain that level of inventory, he will continuously purchase wine to replace what is sold.

Suppliers will allow one month's credit and credit customers will expect one month's credit.

Carey, Knowles & Towers-Clark: Accounting - A Smart Approach Chapter 1 - The Cash Budget Practice questions

Sales levels are predicted to be:

June

July

August

September

October

November

Total sales

6,000

6,500

7,000

8,000

9,500

12,000

Cash sales

3,000

3,500

4,500

5,000

Credit sales

3,000

3,500

4,000

4,500

5,000

7,000

Wine will be sold at a gross profit margin of 20%.

Sean intends to withdraw R500 per month for his own use and will employ a part-time assistant whom he will pay R400 per month.

Sean will need to purchase and install shelving that will be delivered and paid for at the beginning of June at a cost of R3,800. He will also lease a van at a cost of R450 per month.