SECTION A [30 MARKS] Answer ALL the questions in this section. QUESTION 1 1.1 (5 marks) Information: Jumbo Ltd produces tables with a steady monthly demand of 24 000 units. Tables require a component that is acquired from the supplier at R50 per unit. The cost of placing an order is R12 per order and the holding cost is 10% of the unit purchase price. NB: Round off to the next whole number Required: Number of orders per year based on the economic order quantity. 1.2 (5 marks) Information: Rambo Producers has the following sales forecast for Line 1 Product for the first two months of 2022 January 30 000 units February 40 000 units Rambo Producers maintains an inventory, at the end of the month, equal to 20% of the budgeted sales of the following month. Required: Determine the required number of units that should be produced during January 2022. QUESTION 2 Machine A Machine B Initial cost R100 000 R110 000 5 years 5 years Expected economic life Expected disposal/residual value Expected net cash inflows R10 000 0 R R End of: Year 1 34 000 33 000 Year 2 27 000 33 000 Year 3 32 000 33 000 Year 4 30 000 33 000 Year 5 26 000 33 000 Depreciation per year 18 000 22 000 The company estimates that its cost of capital is 14%. 2.1 Calculate the payback period for Machine A and B (answers must be expressed in years, months and days) (5 marks) 2.2 (4 marks) Calculate the accounting rate of return (on average investment) for Machine A. (answer rounded off to 2 decimal places). 2.3 Calculate the net present value of each machine (round off amounts to the nearest Rand). (6 marks) 2.4 Calculate the internal rate of return for Machine B