starplus Limited is well known for its on customer satisfaction and this is highlighted in the company profile.Their about Us page on their webside tells a story of service and growth,all centred around their costomers.This Combined with the exelent quality products offered,has contributed to its success in the market place.At the end of 2022 the fixed assets at (carrying value) totalled R5 300 000,inventories amouted to R5 200 000,R2 100 000 was owed by trade debtors,the accumulated undistributed profits amout to R1 700 000,an amount of R5 900 000 was owed to zap Bank in respect of a long- term loan of R900 000 was owed to the trade creditors.The sales of starplus Limited for 2022 amounted to R8 000 000. The following projections are forecasts were made for 2023 Machinery with a cost price of R1 000 000 and accumulated depreciation of R1 000 000 is expected to be scraped at the end of 2023.Machinery with a cost price of R6 800 000.The sales (all on credit)for 2023 are expected to increase by 30%.The gross margin and net profit margin ratios are estimated to be 30% and 15% respectively. purchase for 2023 ( all on credit) are projected at 6 600 000.accounts perceivable is based on collection period of 36.5 days. The company expects to show a net increase in cash of R130 000 during 2023. 250 000 ordinary shares are expected to be issued at R4 each during January 2023.Dividents will be paid out during 2024.R1 500 000 will be paid to zap Bank during 2023.This includes R500 000 for interest on loan.Accounts payible must be calculated using the percentage of sales method.The amount of external funding(non-current debt) required must be calculated. In keeping with the companies growth strutergy,the directors have identified to possible investment opportunities for 2023 viz. Project A and Project B. an investment of R4 000 000 is required for each project and scrap value of R400 000 is anticipated for project A only. The usefull life of each project is estimated to be five years. Project A is expected to generate a net profit of R700 000(year 1),R650 000 (year 2), R600 000 (year 3), R450 000 (year 4), and R400 000 (year 5). Project B is expected to generate a net profit of R520 000 per year over its useful life.Depreciation is calculated on a straight line of basis. The company's cost of capital is predicted to be 15%. The decision of which project to invest in,if any, will be made at a later stage.

Questions

1. prepare the pro forma statement of financial position as 31 Deceber 2023.(ignore the investment opportunities)

2. Refere to the investment opportunities for 2023 and calculate the following. (ignore taxes)

2.1 accounting rate of on avarage investment of progect A (express to two decimal places).

2.2 Net present value of both projects.

2.3 Internal rate of return of project B (expressed to two decimal places) using interpolation.