QUESTION 1 [10 MARKS] Use the information provided in the table below to answer the given questions Selling Price R25 Variable Cost 15% of selling price Fixed Cost R120 000 Expected sales 25000 units a) Calculate the break-even point in units and the break-even value in Rand (5) b) Determine the margin of safety in units (3) c) What do you understand by the term break-even? (2)

QUESTION 2 [10 MARKS] Mandela Pty Ltd, a furniture manufacturer, has been offered an opportunity to accept a project that has the following mixed stream of cash flows over the next 5 years: Year 1 2 3 4 5 Cash flow 6000 8800 6000 6000 3000 If the company must earn at least 12% on this project. What is the present value of this project?

QUESTION 3 [10 MARKS] Assume a company has cost of equity of 12.50% and after-tax cost of debt of 7.22%. What is the weighted-average cost of capital (WACC) if the target debtequity ratio is 30%?