Read the following case study and answer the questions: FINANCIAL PROJECTIONS OF EMPIRE LIMITED Empire Limited was established in Gauteng in 2017, manufacturing medical equipment and supplies with an initial capital of 5000000 ordinary shares that were issued at R1 each. The sales of the company, which are all on credit, grew steadily during 2018 and 2019 but increased rapidly during 2020 and 2021 following the business opportunities presented to the company by Covid-19. The sales for 2021 increased to Rg000000 and the directors predicted that the sales for 2022 would increase by 20%. At the end of 2021 the accumulated undistributed profits amounted to R1 600000 , fixed assets (at carrying value) totalled R6 000000,R900000 was owed to trade creditors, inventories amounted to R5 500000 and an amount of R4 000000 was owed to Jap Bank in respect of a long-term loan. The directors were interested to know what the financial position of the company would look like at the end of 2022 based on the following additional predictions and information for 2022: A gross margin of 45% and net profit margin of 20% were forecast. The cost of production of finished goods for the year is estimated at R6 500000 . The company provides its customers credit terms of 60 days but a collection period of 73 days is predicted. The percentage-of-sales method is used to estimate the accounts payable. A favourable bank balance of R300 000 is expected on 31 December 2022. Vehicles with a cost price of R500 000 and accumulated depreciation of R400 000 are expected to be sold at the end of 2022 at a profit of R50 000. Due to the expected growth in sales, delivery vehicles with a cost price of R5 000000 will be purchased. The total depreciation for 2022 is estimated at R1 200000. Dividends of R1 500000 are expected to be recommended by the directors at the end of December 2022. These dividends will be paid to the shareholders during 2023. R1 200000 will be paid to Jap Bank during 2022. This amount includes R500 000 for interest. The amount of external funding (non-current debt) required to fund the growth in the company must be determined (balancing figure). The directors are also considering investment opportunities for 2023 and have identified, amongst others, the purchase of additional machinery to increase the productive capacity. The expected cost of the machinery is R8 000000 with a useful life of five years and no scrap value. Depreciation is calculated on a straight-line basis. The new machinery is expected to increase net profit by R950 000 per year. The company's cost of capital is 15%. Answer ALL the questions in this section. Question 1: (14 Marks)