Question1

1.1Complete the table

Tracey started a business. During the first month the following transactions occurred.

1. She opened a bank account for the business and deposited a cheque for the amount of R950 000.
2. The business bought a property R450 000 (R250 000 loan and cash R200 000).
3. Business bought stock for R120 000 cash.
4. Stock was sold for R100 000 cash, which cost R60 000.
5. Business is owing Telkom R24 000.

Example: Bought a truck for R200 000 cash

+ 200K (Non-current asset or NCA) and -200K Bank : You are required to show the signs.

	Assets =	Owners equity +	Liabilities
1
2
3
4
5
Total

1.2 Nayika Ltd is in the process of analysing a project which they call Project Extend. The relevant cash flows for the project are shown in the table below. Nayikas cost of capital is 13%. Complete the table and show basic workings after the questions

Project Extend		Factor	PV amount
Initial Investment	R1000 000
Year	Cash Inflows(Rands)
1	180 000
2	200 000
3	380 000
4	490 000
5	250 000
Total

1. Calculate the project payback period.(in years and months)
2. Calculate the net present value (NPV) of the project .
3. Explain whether the project should be accepted?