hi, yes it is past exam papers. would you be able to solve the questions for me? i am wanting the answers to study for up coming exams

(20 MARKS) QUESTION 1 CASH BUDGET REQUIRED Use the information given below to prepare the following for July, August and September 2017 (using separate monetary columns for each month): (6) Debtors Collection Schedule 1.1 (14) Cash Budget 1.2 INFORMATION Coral Manufacturers supplied the following budgeted information for 2017: The following sales figures were forecast for the 2nd and 3rd quarters of 2017: 1 R R April July 360000 390 000 410 000 May 400 000 August June 380 000 420 000 September 2 Experience has shown that sales take place as follows: 60% of the sales are for cash. The remaining sales are on credit and 30 % percent of these sales are usually collected in the month of the sale. Customers who pay in the month of sale are entitled to a 2 % discount. The balance of the credit sales is expected to be collected in the month after the sale. Purchases are equal to 50 % of sales before any discounts. Half the purchases are for cash and the 3. balance is on credit. Creditors are paid two months after the purchase Salaries and wages are R37 000 per month from June to August 2017. On 01 September 2017 4. employees will receive a 15 % increase in their remuneration. 5 Marketing expenses for June are estimated to be R45 600 and payment is delayed by one month. Marketing expenses is calculated as a percentage of sales. The percentage for June is expected to be maintained for July to September 2017 Administration expenses are R9 000 (including R1 O00 for depreciation) per month. 6 An investment of R50 000 will be made in a fixed deposit account on 31 August 2017. 7 Interest at 6 % per year will be received monthly from September 2017. The hank balance in the ledger of Coral Manufacturers is expected to be R20 000 (favourable) on 8 30 June 2017 (20 MARKS) QUESTION 2 CAPITAL BUDGETING AND CASH FLOW PRINCIPLES REQUIRED 21 (8) Calculate the initial investment of the replacement proiect from the information provided below. INFORMATION Maverick Ltd wants to replace an old machine with a new one that will cost R1 000 000 plus installation costs of R50 000. The old machine has a book value of R10 000 and can be sold for R15 000. R3 000 will be paid to remove the old machine. The old machine required an increase in net working capital of R100 000. The new capital expenditure will result in an increase in the net working capital by R150 000. The company is subjected to a tax rate of 30%. 22 REQUIRED Use the information provided below to calculate the operating cash flows over the five-year (6) period. INFORMATION Tunny Ltd has decided to invest in equipment that cost R130 000, excluding R20 000 installation costs that have to be incurred. The equipment is to be depreciated on a straight-line basis over a five-year period. The following are the expected incremental increases in net operating profit (loss) after taxes over the five-year life of the investment Year R (5 000) (2 000) 2 30 000 20 000 4 10 000 2.3 REQUIRED Calculate the terminal cash flow from the information provided below. (6) INFORMATION Vita Ltd expects to sell a machine at the end of its useful life for R5 000. The machine is expected to have a carrying/book value of RO. The removal and clean-up costs are estimated at R3 000. Net working capital worth R150 000 will be recovered. The company is subject to a 30 % tax rate. (20 MARKS) QUESTION 3 CAPITAL BUDGETING TECHNIQUES Note: Where applicable, use the present value tables that appear after QUESTION 5. REQUIRED Study the information given below and answer the following questions: 3.1 Calculate the Payback Period of both projects. (Answer must be expressed in years, months and days.) (4) 3.2 Calculate the Accounting Rate of Return of Project A. (Answers must be rounded off to 2 decimal places.) (4) 3.3 Calculate the Profitability Index of both projects. (Answers must be expressed to 3 decimal places.) (6) (1) 3.4 On the basis of the profitability index, which project should be chosen? Why? Calculate the Internal Rate of Return of Project B (answer expressed to 2 decimal places). (5) 3.5 INFORMATION The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be chosen. Project B Project A Initial cost R1 000 000 R1 000 000 Expected useful life 5 years 5 years 180 000 Depreciation per year 200 000 Expected net cash flows: R End of year 350 000 300 000 380 000 2 300 000 300 000 300 000 4 240 000 300 000 230 000 5 300 000 Project A is expected to have a scrap value of R100 000 (not included in the figures above), No scrap value is anticipated for Project B. The company estimates its cost of capital to be 12% 61 Manda (20 MARKS) QUESTION 4 LEASING REQUIRED Study the information given below and answer the following questions: Use the net advantage of leasing (NAL) method to determine whether Genesis Ltd should borrow and buy or lease the machine. Your answer must include the following tables: Amortisation schedule showing the interest and principal of the loan 4.1 The after-tax outflows associated with borrowing and buying the machine (18) A comparison of the cash flows associated with leasing versus borrowing and buying State 2 important tax implications to Genesis Ltd if it takes a loan to buy the machine instead of leasing it 4.2 (2) INFORMATION Genesis Ltd wants to purchase a new machine for one of its factories. The cost of the machine is R52 800. It is expected to be completely obsolete in 3 years. Genesis Ltd has the option of borrowing the money at 20% or to lease the machine. If it is leased, the lease payments will be R22 000 per year, payable at the end of each of the next 3 years. Maintenance costs are estimated at R2 200 per year. The tax rate is 30 % QUESTION 5 (20 MARKS) CORPORATE GOVERNANCE REQUIRED Study the information given below and answer the following questions: Provide 4 reasons for the introduction of the Social Responsibility Index by the Johannesburg 5.1 Securities Exchange. (4) (16) Discuss the 4 categories of the Social Responsibility Index. 52 INFORMATION The Johannesburg Securities Exchange(JSE) launched the Social Responsibility Index (SRI) in South Africa in May 2004 The SRI is structured with the four categories of Environment, Society, Governance and related sustainability concerns as well as Climate change END OF PAPER (20 MARKS) QUESTION 1 CASH BUDGET REQUIRED Use the information given below to prepare the following for July, August and September 2017 (using separate monetary columns for each month): (6) Debtors Collection Schedule 1.1 (14) Cash Budget 1.2 INFORMATION Coral Manufacturers supplied the following budgeted information for 2017: The following sales figures were forecast for the 2nd and 3rd quarters of 2017: 1 R R April July 360000 390 000 410 000 May 400 000 August June 380 000 420 000 September 2 Experience has shown that sales take place as follows: 60% of the sales are for cash. The remaining sales are on credit and 30 % percent of these sales are usually collected in the month of the sale. Customers who pay in the month of sale are entitled to a 2 % discount. The balance of the credit sales is expected to be collected in the month after the sale. Purchases are equal to 50 % of sales before any discounts. Half the purchases are for cash and the 3. balance is on credit. Creditors are paid two months after the purchase Salaries and wages are R37 000 per month from June to August 2017. On 01 September 2017 4. employees will receive a 15 % increase in their remuneration. 5 Marketing expenses for June are estimated to be R45 600 and payment is delayed by one month. Marketing expenses is calculated as a percentage of sales. The percentage for June is expected to be maintained for July to September 2017 Administration expenses are R9 000 (including R1 O00 for depreciation) per month. 6 An investment of R50 000 will be made in a fixed deposit account on 31 August 2017. 7 Interest at 6 % per year will be received monthly from September 2017. The hank balance in the ledger of Coral Manufacturers is expected to be R20 000 (favourable) on 8 30 June 2017 (20 MARKS) QUESTION 2 CAPITAL BUDGETING AND CASH FLOW PRINCIPLES REQUIRED 21 (8) Calculate the initial investment of the replacement proiect from the information provided below. INFORMATION Maverick Ltd wants to replace an old machine with a new one that will cost R1 000 000 plus installation costs of R50 000. The old machine has a book value of R10 000 and can be sold for R15 000. R3 000 will be paid to remove the old machine. The old machine required an increase in net working capital of R100 000. The new capital expenditure will result in an increase in the net working capital by R150 000. The company is subjected to a tax rate of 30%. 22 REQUIRED Use the information provided below to calculate the operating cash flows over the five-year (6) period. INFORMATION Tunny Ltd has decided to invest in equipment that cost R130 000, excluding R20 000 installation costs that have to be incurred. The equipment is to be depreciated on a straight-line basis over a five-year period. The following are the expected incremental increases in net operating profit (loss) after taxes over the five-year life of the investment Year R (5 000) (2 000) 2 30 000 20 000 4 10 000 2.3 REQUIRED Calculate the terminal cash flow from the information provided below. (6) INFORMATION Vita Ltd expects to sell a machine at the end of its useful life for R5 000. The machine is expected to have a carrying/book value of RO. The removal and clean-up costs are estimated at R3 000. Net working capital worth R150 000 will be recovered. The company is subject to a 30 % tax rate. (20 MARKS) QUESTION 3 CAPITAL BUDGETING TECHNIQUES Note: Where applicable, use the present value tables that appear after QUESTION 5. REQUIRED Study the information given below and answer the following questions: 3.1 Calculate the Payback Period of both projects. (Answer must be expressed in years, months and days.) (4) 3.2 Calculate the Accounting Rate of Return of Project A. (Answers must be rounded off to 2 decimal places.) (4) 3.3 Calculate the Profitability Index of both projects. (Answers must be expressed to 3 decimal places.) (6) (1) 3.4 On the basis of the profitability index, which project should be chosen? Why? Calculate the Internal Rate of Return of Project B (answer expressed to 2 decimal places). (5) 3.5 INFORMATION The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be chosen. Project B Project A Initial cost R1 000 000 R1 000 000 Expected useful life 5 years 5 years 180 000 Depreciation per year 200 000 Expected net cash flows: R End of year 350 000 300 000 380 000 2 300 000 300 000 300 000 4 240 000 300 000 230 000 5 300 000 Project A is expected to have a scrap value of R100 000 (not included in the figures above), No scrap value is anticipated for Project B. The company estimates its cost of capital to be 12% 61 Manda (20 MARKS) QUESTION 4 LEASING REQUIRED Study the information given below and answer the following questions: Use the net advantage of leasing (NAL) method to determine whether Genesis Ltd should borrow and buy or lease the machine. Your answer must include the following tables: Amortisation schedule showing the interest and principal of the loan 4.1 The after-tax outflows associated with borrowing and buying the machine (18) A comparison of the cash flows associated with leasing versus borrowing and buying State 2 important tax implications to Genesis Ltd if it takes a loan to buy the machine instead of leasing it 4.2 (2) INFORMATION Genesis Ltd wants to purchase a new machine for one of its factories. The cost of the machine is R52 800. It is expected to be completely obsolete in 3 years. Genesis Ltd has the option of borrowing the money at 20% or to lease the machine. If it is leased, the lease payments will be R22 000 per year, payable at the end of each of the next 3 years. Maintenance costs are estimated at R2 200 per year. The tax rate is 30 % QUESTION 5 (20 MARKS) CORPORATE GOVERNANCE REQUIRED Study the information given below and answer the following questions: Provide 4 reasons for the introduction of the Social Responsibility Index by the Johannesburg 5.1 Securities Exchange. (4) (16) Discuss the 4 categories of the Social Responsibility Index. 52 INFORMATION The Johannesburg Securities Exchange(JSE) launched the Social Responsibility Index (SRI) in South Africa in May 2004 The SRI is structured with the four categories of Environment, Society, Governance and related sustainability concerns as well as Climate change END OF PAPER