Periods Discount rates (r) (n) 1% 2% 3% 9% 10% 1 5 4% 6% 7% 8% 0.990 0.980 0.971 0.902 0.952 0.943 0.935 0.926 0.917 0.909 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0971 0.942 0.915 0.889 0864 0.840 0.816 0.794 0.772 0.751 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.933 0.871 0.813 0.700 0.711 0.665 0.623 0.583 0.547 0.513 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0914 0.837 0.766 0.703 0645 0.592 0.544 0.500 0.460 0.424 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.366 11 0.896 0.804 0.722 0.650 0.585 0.527 0475 0.429 0.388 0.350 12 0.887 0.788 0.701 0.625 0.567 0.497 0.444 0.397 0.356 0.319 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 14 0.870 0.758 0.661 0.577 0505 0.442 0.388 0.340 0.299 0.263 15 0.861 0.743 0.642 0,555 0.481 0.417 0.362 0.315 0.275 0.239 10 11% 12% 13% 14% 15% 16% 17% 19% 20% 1 0.833 0.694 2 3 0.579 4 5 6 7 8 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.000 0.593 0.659 0.636 0.613 0.502 0.572 0.552 0.534 0.510 0.499 0.482 0.593 0.567 0.543 0.519 0497 0.476 0.456 0.437 0.419 0.402 0.535 0.507 0.480 0.456 0.432 0.410 0.300 0.370 0.352 0.335 0.482 0.452 0.425 0400 0.376 0.354 0.333 0.314 0.296 0.279 0.434 0,404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0317 0.297 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0286 0.257 0231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.250 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.003 0.232 0,205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.209 0.183 0.160 0.140 0.123 0.108 0.005 0.084 0.074 0.065 9 10 11 12 13 14 15 1 2 3 4 5 6 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% 0.826 0.820 0813 0.807 0.800 0.794 0.787 0.781 0.775 0.769 0.683 0.672 0.661 0.650 0.640 0.630 0.620 0.610 0.601 0.562 0.505 0.551 0.537 0.525 0.512 0.500 0.488 0.477 0.466 0.455 0467 0.451 0.437 0.423 0.410 0.397 0.384 0.373 0.361 0.350 0.386 0.370 0.355 0.341 0.328 0.315 0.303 0.291 0.280 0.269 0319 0.303 0289 0.275 0,262 0.250 0.230 0.227 0.217 0.207 0.263 0.249 0.235 0222 0,210 0.198 0.188 0.178 0.168 0.159 0218 0.204 0.191 0.179 0.168 0.157 0.148 0.139 0.130 0.123 0.180 0.167 0.155 0.144 0.134 0.125 0.116 0.108 0.101 0.094 0.149 0.137 0.126 0.116 0.107 0.099 0.092 0.085 0.078 0.073 0.123 0.112 0.103 0.094 0.086 0.079 0.072 0.066 0.061 0.066 0.102 0.092 0.083 0.076 0.089 0.063 0.057 0.052 0.047 0.043 0.084 0.075 0.008 0.061 0.055 0.050 0.045 0.040 0.037 0.033 0.069 0.062 0.055 0.049 0044 0.039 0.035 0.032 0.028 0.025 15 0.057 0.051 0.045 0.040 0.035 0.031 0.028 0.025 0.022 0.020 7 8 9 10 11 13 234 678905 12444 (QUESTIONS CONTINUE ON NEXT PAGE) SECTION B: Answer any three of the following four questions. All questions in this section are worth equal marks. QUESTION 2 Solutions Ltd. has prepared three forecasted demand quantities for the next period for a timber treatment. The original budget was to produce 12,000 litres and the manufacturing cost per litre per of the product as follows: Number of Litres 12,000 Costs Variable costs Direct materials Direct labour Overheads 1,440 1,200 1,920 840 Fixed costs: Indirect labour Overheads Total cost Cost per litre 1,920 7,320 0.61 Required a) Estimate the manufacturing cost per litre of the product at the other two levels of demand 16,800 and 21,600 litres. (7 marks) b) Explain with examples the difference between fixed and semi-fixed costs and comment on why the cost per litre of the product changes with the increase in the number of litres made. (8 marks) c) The timber treatment will be sold for 1.00/litre at 12,000 litres activity level. Calculate the budgeted break-even sales, in litres, for this product and the margin of safety in percentage if the budgeted sales is 12,000 litres. (5 marks) d) In order to have reliable results from Break-even analysis, some assumptions must be met. Evaluate and discuss those assumptions. (5 marks) Total: 25 marks