The Volksland Motors Group is based in the Northern frontier of Mill-land City, an industrial estate in the Republic of Zee Land. The companys planning and actual budgets for December appear below:

The Volksland Motors Group Budgeted and actual report for the year ending December 31 st , 2020

A ) From the data above, assess the budget and prepare report showing The Volksland Motor Groups revenue and spending variance for December. Based on this report with analysis of profitability ratios, which area/s of activity should be of concern to the management and WHY?

B) Outline the importance of possible uses of financial information including cash budgeting by different stakeholders. Show drawbacks of budgeting and suggest practical ways through which The Volksland Motor Groups could go about minimising these?

C) The Executive Board of The Volksland Motor Group after reviewing annual report have decided to explore options to fulfil objective of green energy. Director production has suggested to use of solar panels to reduce energy cost and meet green energy objectives. The solar panels require investment of 600,000 after Zeeland Govt grant with useful life of 25 years. This investment will save annual energy cost by 120,000. Solar panels require annual maintenance cost of 10,000 after three years of use. Recommend the viability of this investment using appraisal technique (NPV, Payback, Discounted Cash Flow etc) that company could employ in evaluating their options in this respect (based on their circumstances). It is noted that cost of capital is 10% and inflation is 4% in Zeeland.

D) Evaluate by demonstrating an understanding of different sources of finance available to The Volksland Motor Group to fund solar energy project. Explain the measures they can/should adopt to ensure sustainability in their operations

Production(q)RevenuesVariableproductioncost:DirectMaterialDirectLabourMachiningcostOthervariablecostFixedProductioncost:IndirectLabourDepreciationInsuranceProductionTaxesAdministrativeExpensesMarketingExpensesResearchanddevelopmentNetOperatingIncomeACTUAL(O00)2100035,0005000438646009000185010008744632452169612262433BUDGET(000)1700029,400429435803900765016011000874440183810809202223 Required