QUESTION TWO Extracts of the Statement of Comprehensive income, Statement of Financial Position and other financial information for Spar Limited appear below. INFORMATION Spar Limited Statement of comprehensive income for the year ended 31 December 2022

R Sales 803 750 Cost of sales (676 500) Gross profit 127 250 Operating expenses (92 250) Operating profit 35 000 Interest expense (12 250) Profit before tax 22 750 Income tax (9 100) Profit after tax 13 650 Statement of Financial Position as at 31 December 2022 Assets R Non-current assets 146 250 Current assets 327 500 Total assets 473 750 Equity and liabilities Shareholders equity 196 650 Non-current liabilities 128 250 Current liabilities 148 850 Total equity and liabilities 473 750 Note - Current assets (R327 500) include accounts receivable of R168 000, inventories of R75 000 and cash of R84 500. - Inventories as at 31 December 2021 amounted to R105 000. - Current liabilities comprise accounts payable only. - All purchases and sales are on credit.

REQUIRED Calculate the following ratios. Where applicable, round off answers to two decimal places. 2.1 Profit margin (4 marks) 2.2 Debtor collection period (4 marks) 2.3 Creditor payment period (4 marks) 2.4 Inventory turnover (5 marks) 2.5 Return on own capital (4 marks) 2.6 Acid test ratio (4 marks)

QUESTION THREE 3.1 Your parents set up a trust fund for you 18 years ago that is now worth R32 786,51. If the fund earned 6% per year, how much did your parents invest? (5 marks) 3.2 Suppose you are offered an investment that will allow you to double your money in 8 years. You have R10 000 to invest. What is the implied rate of interest? (7 marks) 3.3 Suppose you have a 1-year old daughter and you want to provide R81 000 in 19 years towards her college education. You currently have R2 000 to invest. What interest rate must you earn to have the R81 000 when you need it? (7 marks) 3.4 Suppose you want to buy a new house. You currently have R15 000 and you figure you need to have a 10% down payment plus an additional 5% of the loan amount in closing costs. If the type of house you want costs about R150 000 and you can earn 8.1% per year, how long will it be before you have enough money for the down payment and closing costs? ( 6 marks)