Read the case study and answer the questions that follow:

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DREAMIT ELECTRONICS LTD: PROJECTIONS FOR $2024$ AND $2025$

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After posting excellent sales and net profit in the previous year Dreamit Electronics Ltd set its sights on growth and innovation as it celebrated its $10$th anniversary in $2023.$ It has continually strived to become the leader in the electronics industry in South Africa. The company is also committed to being a good corporate citizen, as it strives to fulfil both its economic and social responsibilities.

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The following reflects the financial position of the company on $31$ December $2023$:

The carrying value of the fixed assets was R$30000000$ whilst the current assets comprised inventory of R$9400000,$ accounts receivable of R$8000000$ and cash of R$1600000.$ The equity consisted of ordinary share capital, R$17000000,$ and retained earnings of R$6400000.$ An amount of R$22000000$ was owed to Mesa Bank for a long$-$term loan. Trade creditors were owed R$3600000.$

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The following projections and proposals were made by Dreamit Electronics Ltd for $2024$:

The sales are expected to increase from R$30000000$ in $2023$ to R$40000000$ in $2024.$ All the sales are on credit. Accounts receivable is based on a collection period of $36\mathrm{.}5$ days. Accounts payable must be calculated using the percentage$-$of$-$sales method. The gross margin and net profit margin ratios are expected to be $25\%$ and $10\%$ respectively for $2024.$ All purchases of inventory are on credit. Purchases for $2024$ are projected at R$25000000.$ The company expects to show a net increase in cash of R$500000$ during $2024.$ R$24000000$ will be spent on additional land and buildings during the fourth quarter of $2024.$ The total depreciation for $2024$ is forecasted at R$4000000.$ During January $2024,1000000$ ordinary shares are expected to be sold at R$4$ each. Dividends of R$3000000$ are expected to be recommended by the directors at the end of $2024.$ These dividends will be paid during $2025.$ R$5500000$ will be paid to Mesa Bank during $2024.$ This amount includes R$2000000$ for interest on loan. The amount of external funding $($non$-$current debt$)$ required must be calculated.

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Dreamit Electronics Ltd has identified a new machine that it is considering for purchase at the start of $2025.$ The cost the machine is R$4000000.$ The machine is expected to have a useful life of five years. No scrap value is anticipated. The annual profits that are expected to be generated from the machine are as follows: Year $1$ R$600000$; Year $2$ R$620000$; Year $3$ R$700000$; Year $4$ R$660000$; Year $5$ R$560000.$ The cost of capital is $15\%.$ Depreciation is estimated at R$800000$ per year.

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QUESTIONS

$1.$ Prepare the Pro Forma Statement of Financial Position as at $31$ December $2024.$

$($Ignore the investment opportunity for $2025.)$

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$2.$ Refer to the investment opportunity for $2025($the purchase of a new machine$)$ and calculate the following. Ignore taxes. Use only the four$-$decimals present value tables that appear in the attached image.

$2\mathrm{.}1$ Accounting Rate of Return on average investment $($expressed to two decimal places$).$

$2\mathrm{.}2$ Net Present Value. Your answer must reflect the calculations of the present values and NPV$.$

$2\mathrm{.}3$ Internal Rate of Return $($expressed to two decimal places$)$ if the net cash flows are R$1200000$ per year for five years. Your answer must include two net present value calculations $($using consecutive rates$/$percentages$)$ and interpolation.

$($ To the expert answering this, please ignore all text beyond this point and instead refer to the attached image to answer the questions above, thank you$)$

NumbPeriods$67891012141620260$NumberofPeriods$411920340$S$019\%6029\%0\mathrm{.}93270\mathrm{.}87060\mathrm{.}8131)\mathrm{.}94200\mathrm{.}88800\mathrm{.}83750\mathrm{.}7903|0\mathrm{.}99010\mathrm{.}98040\mathrm{.}97090\mathrm{.}9615$I $0\mathrm{.}9524094340\mathrm{.}93460\mathrm{.}98030,96120,94260\mathrm{.}92460\mathrm{.}90700\mathrm{.}89000\mathrm{.}87340\mathrm{.}97060,9423|0,9151|0\mathrm{.}88900\mathrm{.}86380,83960\mathrm{.}8163340\mathrm{.}92350\mathrm{.}85350\mathrm{.}78940\mathrm{.}73070\mathrm{.}8360020020\mathrm{.}82770\mathrm{.}68644|0\mathrm{.}9143|0\mathrm{.}8368|0\mathrm{.}7664|0\mathrm{.}70260\mathrm{.}90530\mathrm{.}82030\mathrm{.}7441|0\mathrm{.}8195|0\mathrm{.}67300,85280,72840\mathrm{.}62320\mathrm{.}53390$ swA o$030\mathrm{.}57030\mathrm{.}47460\mathrm{.}39570\mathrm{.}74620\mathrm{.}75990\mathrm{.}71070\mathrm{.}7050$ D$\mathrm{.}66630\mathrm{.}6651|0\mathrm{.}62270\mathrm{.}67680\mathrm{.}6274)\mathrm{.}58200\mathrm{.}64460\mathrm{.}59190\mathrm{.}54390\mathrm{.}89630\mathrm{.}80430\mathrm{.}72240\mathrm{.}64960\mathrm{.}58470\mathrm{.}52680\mathrm{.}88740\mathrm{.}78850\mathrm{.}70140\mathrm{.}62460\mathrm{.}55680\mathrm{.}49700\mathrm{.}87870\mathrm{.}77300\mathrm{.}68100\mathrm{.}60060\mathrm{.}53030,4688$ D$\mathrm{.}4150)\mathrm{.}87000\mathrm{.}75790\mathrm{.}66110\mathrm{.}57750\mathrm{.}50510\mathrm{.}4423)\mathrm{.}387819\%0\mathrm{.}67170,45290\mathrm{.}30660\mathrm{.}208329\%0\mathrm{.}60800\mathrm{.}37150,22810\mathrm{.}1407$L$\mathrm{.}97041\mathrm{.}9416$APPENDIX $1$: Present value of R$10\mathrm{.}77980\mathrm{.}60950\mathrm{.}47760\mathrm{.}37510\mathrm{.}29530\mathrm{.}23300\mathrm{.}74190\mathrm{.}55210\mathrm{.}41200\mathrm{.}30836913\mathrm{.}003712\mathrm{.}106213\mathrm{.}865112\mathrm{.}84930\mathrm{.}45810\mathrm{.}39364\%0\mathrm{.}23140\mathrm{.}17410\mathrm{.}14200\mathrm{.}09720\mathrm{.}08720\mathrm{.}0543|0\mathrm{.}55040\mathrm{.}30480\mathrm{.}16970\mathrm{.}09510\mathrm{.}05350,03030\mathrm{.}01736020\mathrm{.}33050\mathrm{.}31187\%5\%0\mathrm{.}47510\mathrm{.}444089\%0\mathrm{.}92590\mathrm{.}91740\mathrm{.}85730\mathrm{.}8417$D$\mathrm{.}79380\mathrm{.}77220\mathrm{.}73500\mathrm{.}70840\mathrm{.}68060\mathrm{.}64996\%0\mathrm{.}33870\mathrm{.}2919)31660032059025020\mathrm{.}63020\mathrm{.}59630,56450\mathrm{.}53460\mathrm{.}50660,48030,45560\mathrm{.}58350.,54700.$SI