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REQUIRED For each question below, remember to: Clearly show all your calculations in detail; . Where necessary, indicate irrelevant amounts/adjustments with a RO (nil-value); (a)
REQUIRED For each question below, remember to: Clearly show all your calculations in detail; . Where necessary, indicate irrelevant amounts/adjustments with a RO (nil-value); (a) Explain the types of the capital investment projects Pepper Clothing is planning to embark on and advise on how best these can be evaluated using capital budgeting techniques. (4) (b) Calculate the net present value (NPV) in South African Rand for each of the two capital investments, applying the information provided in the scenario. (17) (c) As the Senior Finance Manager of Pepper Clothing, you are required to prepare a report to the Chief Executive evaluating the investment decision and its funding. Your report should include the following sections: (i) An evaluation of the two investments, including a discussion of the key risk factors (10) Pepper Clothing should consider. (ii) A discussion of how the abandonment, timing and strategic features of each investment option may impact the investment decision. (4) (iii) A discussion of the advantages and disadvantages of the three methods of funding outlined in the scenario for Investment 2. Use appropriate calculations, where (12) possible, to support your arguments. (iv) Recommendations about the choice of investment and, if relevant, the method of (3) funding. Total question 2 [50] TOTAL (questions 1 and 2) 10016323 "I '4\" [E'
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