Study the information given below and answer the following questions independently. As far as possible use the contribution margin model to present your answers. 3.1 Calculate the number of skirts that Beads4us must sell to break even each month. (5 marks) 3.2 Calculate the selling price per unit that will enable Beads4us to break even. (5 marks) Calculate the total Contribution Margin and Operating Profit/Loss, if the selling price drops by R30 per skirt. 3.3 (5 marks) Beads4us is considering paying the salespersons a monthly salary instead of a sales commission. How much can it afford to pay in salaries and achieve an operating profit of R50 000 per month. 3.4 (5 marks) Suppose Beads4us has the opportunity to rent machines to reduce work time. Doing so would increase the total fixed costs of operating the workshop by R12 000 per month. Using the machines will reduce the labour time to 1.5 hours for each skirt. Those who make the skirts will still be paid R30 per hour and material costs remains unchanged. Will renting the machines be more profitable? Show the relevant calculations. 3.5 (5 marks) INFORMATION CORPORATE SOCIAL RESPONSIBILITY As part of its corporate social responsibility commitments, Libra Ltd decided to assist budding entrepreneurs of a rural community by providing them with financial assistance and training to set up a small business entity by using their creative talents with beads. The business was named Beads4us. Beads4us uses beads to make skirts. The fixed costs of operating the workshop and a small office were estimated at R96 000 a month. Each skirt requires beads and other materials that cost R92. Each skirt takes two hours to make, and the budding entrepreneurs who make the skirts would receive R30 an hour. The skirts would be sold to retail outlets for R280 each. Beads4us will spend R4 000 per month on advertising. They expect to sell 2 000 skirts per month and the salespersons, who work on commission basis only, will be given a commission of 10% of the selling price. Answer the following questions from the information provided below. 4.1 Calculate the following: 4.1.1 Payback Period (expressed in years and months) (3 marks) 4.1.2 Net Present Value (4 marks) 4.1.3 Accounting Rate of Return on initial investment (expressed to two decimal places) (4 marks) 4.1.4 Internal Rate of Return (expressed to two decimal places) using interpolation (6 marks) Suppose Libra Ltd funds the purchase of the new equipment through the issue of 12% preference shares that are expected to sell for R100 each. If the floatation costs are estimated at R10 per share, calculate the cost of the preference shares (expressed to two decimal places). 4.2 (4 marks) Suppose Libra Ltd funds the purchase of the new equipment through the issue of ordinary shares. Assume that the present value of an ordinary share of Libra Ltd is R30, the next projected dividend is R2.50 per share and the expected growth rate in dividends is 11% p.a. Use the Gordon growth model to estimate the cost of the ordinary shares (expressed to two decimal places). (4 marks) INFORMATION Libra Ltd is looking at the possibility of investing in new equipment. The equipment would cost R1 200 000, and its cash operating expenses would total R240 000 per year. On the benefit side, the equipment would generate an additional R600 000 per year in revenues. The equipment has an estimated useful five of five years. At the end of five years, the equipment is expected to be sold for R40 000. The cost of capital is 12%. Libra Ltd uses the straight-line method of depreciation. Ignore taxes