QUESTION $4(21$ marks$)$Jomo Ltd is considering making a bid for Ikapa Ltd$.$The following information should be used to value Ikapa Ltd$.$Statement of profit or loss for the most recent accountingperiod $(2023)$RmillionRevenue $350$Cost of sales $(140)$Gross profit $210$Operating expenses $($excluding depreciation$)(72)$Depreciation $(8)$Profit from operations $130$Finance costs $(21)$Profit before tax $109$Taxation $(29)$Profit after tax $80$Additional information: Selling prices are expected to rise at $9\%$ per year for the next $3$ years and then stayconstant thereafter. Sales volumes are expected to rise at $6\%$ per year for the next $3$ years and then stayconstant thereafter. Assume that cost of sales is a completely variable cost. Operating expenses $($excluding depreciation$)$ are expected to increase at $8\%$ per yearfor the next $3$ years and then stay constant thereafter. Depreciation is expected to increase by R $2$ million in the first year, then decrease byR $1$ million in the second year and then stay constant in the future. Ikapa Ltd finance costs are expected to decrease by R $1$ million in both the first andsecond years respectively and then stay constant in the future. Ikapa Ltd would like to replace outdated computer equipment at a cost of R $5$ million inthe first year. As soon as the new equipment is bought, some of the old computerequipment will be sold for R $0\mathrm{.}8$ million. After the system changeover, the remainder ofthe old computer equipment will be sold for R $1\mathrm{.}5$ million the following year. The marginal tax rate is $27\%,$ payable in the year in which the liability arises$\mathrm{.}12$ Assume that book depreciation equals tax depreciation. Ikapa Ltd has $10$ million shares in issue. Ikapa Ltds cost of equity is $10\%.$Required:$4\mathrm{.}1$ Calculate the value of the equity in Ikapa Ltd $($in total and per share$)$ by forecastingfuture cash flows to equity and discounting them to present value using the cost ofequity. $(21$ marks$)[$Question total: $21$ marks$][$CIMA adapted$]$