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QUESTION 2 ( 2 0 Marks ) 2 . 1 REQUIRED Use the information provided below to determine the cost ( as a percentage, expressed
QUESTION Marks REQUIRED Use the information provided below to determine the cost as a percentage, expressed to two decimal places to Sibiya Stores of not accepting the discount. Assume a day year. marks INFORMATION The credit terms granted by Mega Manufacturers to Sibiya Stores are net days. REQUIRED Use the information given below to calculate the following: Economic Order Quantity marks Reorder point. marks INFORMATION The following details have been supplied by Tonga Suppliers for the only product that it sells: Sales per month units Carrying costs as a percentage of the unit purchase price Purchase price per unit R Cost of placing an order R The time that elapses between placing an order and the receipt of the products days Number of days that Tonga Suppliers operates in a year days REQUIRED Use the Dividend Growth Model to estimate the cost of the ordinary shares expressed as a percentage to two decimal places from the information provided below. marks INFORMATION The present value of a Torga Limited ordinary share is R the dividend at the end of the previous year was R and the expected growth rate in dividends is pa REQUIRED Use the information provided below to calculate the weighted average cost of capital expressed as a percentage to two decimal places marks INFORMATION The optimal capital share of Yolo Limited is ordinary share, preference share and debt financing. The pretax costs of capital for ordinary shares, preference shares and debt are and respectively. The tax rate is QUESTION Marks REQUIRED Study the information provided below and prepare the following for July and August Debtors Collection Schedule marks Cash Budget marks INFORMATION Glenville Limited is in the process of developing a cash budget for July and August The following information is available: Expected sales from May to August are as follows: May R June R July R August R Historically of the companys sales has been on cash and the rest on credit. Twenty percent of the cash sales is subject to a discount of Sixty percent of the credit sales is usually collected in the month after the sales, thirty five percent is collected two months after the sale and the balance is written off as bad debts. During August the company expects to receive a dividend of cents per share on the shares that it holds in Camry Limited. The companys purchases of inventory are estimated to be of sales. Thirty percent is paid in cash and a discount of is receivable. The balance is paid in the month after the purchase. Separate entries are required for the cash purchases and payments for credit purchases. The monthly rental, payable at the end of each month, will increase by with effect from August The rental payable on August is R The fixed salary cost for is R and is paid evenly every month. Interest on loan for two months at a rate of per year is payable on the loan balance of R during August New machinery with a cost price of R will be purchased and paid for during July Other cash operating expenses are forecast at R for June and are expected to increase by each month. Cash in the bank on June is expected to amount to R QUESTION Marks REQUIRED Use the information provided below to answer the following questions. Calculate the following ratios for only. Note: Use the formulas provided in the formula sheet only that appear after QUESTION Answers to the ratios must be expressed to two decimal places. Inventory turnover marks Net profit margin marks Debtequity marks Earnings per share marks Finance cost coverage marks Average collection period marks Will the company be able to pay its shortterm debts if business conditions are unfavourable? Motivate your answer by using an appropriate ratio. marks Will the shareholders of the company be satisfied with the return on their investments? Support your answer with the use of an appropriate ratio. marks INFORMATION The extracts of the financial statements of Fabrice Limited for and are provided below. FABRICE LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER R Sales Cost of sales Earnings before interest and taxes Interest expense Profit before tax Company tax STATEMENT OF FINANCIAL POSITION AS AT DECEMBER: R R Noncurrent assets Inventories Accounts
QUESTION
Marks
REQUIRED
Use the information provided below to determine the cost as a percentage, expressed to two decimal places to Sibiya Stores of not accepting the discount. Assume a day year.
marks
INFORMATION
The credit terms granted by Mega Manufacturers to Sibiya Stores are net days.
REQUIRED
Use the information given below to calculate the following:
Economic Order Quantity
marks
Reorder point.
marks
INFORMATION
The following details have been supplied by Tonga Suppliers for the only product that it sells:
Sales per month
units
Carrying costs as a percentage of the unit purchase price
Purchase price per unit
R
Cost of placing an order
R
The time that elapses between placing an order and the receipt of the products
days
Number of days that Tonga Suppliers operates in a year
days
REQUIRED
Use the Dividend Growth Model to estimate the cost of the ordinary shares expressed as a percentage to two decimal places from the information provided below.
marks
INFORMATION
The present value of a Torga Limited ordinary share is R the dividend at the end of the previous year was R and the expected growth rate in dividends is pa
REQUIRED
Use the information provided below to calculate the weighted average cost of capital expressed as a percentage to two decimal places
marks
INFORMATION
The optimal capital share of Yolo Limited is ordinary share, preference share and debt financing. The pretax costs of capital for ordinary shares, preference shares and debt are and respectively. The tax rate is
QUESTION
Marks
REQUIRED
Study the information provided below and prepare the following for July and August
Debtors Collection Schedule
marks
Cash Budget
marks
INFORMATION
Glenville Limited is in the process of developing a cash budget for July and August The following information is available:
Expected sales from May to August are as follows:
May
R
June
R
July
R
August
R
Historically of the companys sales has been on cash and the rest on credit. Twenty percent of the cash sales is subject to a discount of
Sixty percent of the credit sales is usually collected in the month after the sales, thirty five percent is collected two months after the sale and the balance is written off as bad debts.
During August the company expects to receive a dividend of cents per share on the shares that it holds in Camry Limited.
The companys purchases of inventory are estimated to be of sales. Thirty percent is paid in cash and a discount of is receivable. The balance is paid in the month after the purchase. Separate entries are required for the cash purchases and payments for credit purchases.
The monthly rental, payable at the end of each month, will increase by with effect from August The rental payable on August is R
The fixed salary cost for is R and is paid evenly every month.
Interest on loan for two months at a rate of per year is payable on the loan balance of R during August
New machinery with a cost price of R will be purchased and paid for during July
Other cash operating expenses are forecast at R for June and are expected to increase by each month.
Cash in the bank on June is expected to amount to R
QUESTION
Marks
REQUIRED
Use the information provided below to answer the following questions.
Calculate the following ratios for only. Note: Use the formulas provided in the formula sheet only that appear after QUESTION Answers to the ratios must be expressed to two decimal places.
Inventory turnover
marks
Net profit margin
marks
Debtequity
marks
Earnings per share
marks
Finance cost coverage
marks
Average collection period
marks
Will the company be able to pay its shortterm debts if business conditions are unfavourable? Motivate your answer by using an appropriate ratio.
marks
Will the shareholders of the company be satisfied with the return on their investments? Support your answer with the use of an appropriate ratio.
marks
INFORMATION
The extracts of the financial statements of Fabrice Limited for and are provided below.
FABRICE LIMITED
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER
R
Sales
Cost of sales
Earnings before interest and taxes
Interest expense
Profit before tax
Company tax
STATEMENT OF FINANCIAL POSITION AS AT DECEMBER:
R
R
Noncurrent assets
Inventories
Accounts
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