APPENDIX A: ASSIGNMENT/ PROJECT COVER SHEET

ASSIGNMENT/ PROJECT COVER SHEET

MWALE
Surname
YAHYA
First Name/s
157876
Student Number
ACCOUTING AND FINANCE
Subject
1
Assignment Number
-
Tutor’s Name

Examination Venue
PIETERMARITZBURG-ASCOTT INN CONFERENCE CENTRE
Date Submitted

Submission (√) First Submission Resubmission
P0 BOX 1157
ESTCOURT
Postal Address
KWA ZULU NATAL
3310

Yahyamwale0301@gmail.com
E-Mail
(Work) 063 288 2440
(Home) 036 352 5537
Contact Numbers
(Cell) 063 288 2440

HIGHER CERTIFICATE IN BUSSINESS MANAGEMENT

Course/Intake

Declaration: I hereby declare that the assignment submitted is an original piece of work produced by myself.

Signature: Y.MWALE Date: 29 MAY 2020

1
TABLES CONTENT

Question One……………………….3-4
Question Two………………………5-6
Question Three……………………..7-9

2
QUESTION 1

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑠𝑡𝑠−𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
1.1) Acid-test ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

860.000−180000
=
1200000

= 5,7: 1

𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
1.2) Debtors collection period= × 365
𝐶𝑟𝑒𝑑𝑖𝑡 𝑠𝑎𝑙𝑒𝑠

330000
= × 365
10500000

= 11.5

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑝𝑟𝑜𝑓𝑖𝑡 100

1.3) Return an assets = ×
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 1

480000 100
= ×
1520000 1

= 315.9

3
 𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥 100
1.4) Profit margin = ×
𝑠𝑎𝑙𝑒𝑠 1

2695000 100
= ×
10500000 1

= 25.7

𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥 100

1.5) Return on own capital = ×
𝑜𝑤𝑛 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 1

2695000 100
= ×
900000 1

= 299.44

4
QUESTION 2

2.1)

Debtors Credit sales Jan Feb March

collection R R R R
schedule

Month
January(Jan 21000 4116 - -
𝑹 𝟐𝟏𝟎𝟎𝟎 ×
𝟐𝟎% × 𝟗𝟖%)

(FEB)
R 21000×50% -

10500

FEB (FEB) 240000 - 47040

(𝟐𝟒𝟎𝟎𝟎𝟎 × 𝟐𝟎%
× 𝟗𝟖%)

March(𝟐𝟒𝟎𝟎𝟎𝟎 ×
𝟓𝟎%)
-

- 120000
March(𝟑𝟎𝟎𝟎𝟎𝟎 × 300000 - - 58800
𝟐𝟎% × 𝟗𝟖%
4116 57540 178800

5
2.2)
Tulane Traders
Cash budget for the period 01 Jan to 31 March 2020

January February March

Cash receipts 91616 217540 378800
Cash Sales 875000 160000 200000
Receipts from 4116 57540 178800
debtors
Cash 47200 71200 246200
Payments
Cash - - -
Purchases
Payments to - 24000 30000
Creditors
Wages 36000 36000 36000
Fixed - - 80000
overheads
- - 80000
administrative
expenses
Investment - - 9000
Rent income 11200 11200 11200
Cash Surplus 44416 146340 132600
(shortfall)
Opening cash 120000 164416 310756
balance
Closing cash 164416 310756 443356
balance

6
QUESTION 3

𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑎𝑛𝑛𝑢𝑎𝑙 𝑝𝑟𝑜𝑓𝑖𝑡 100

3.1) Accounting rate of return = ×
𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑖𝑛𝑣𝑒𝑠𝑡 1

117000 100
= ×
200000 1

= 60%

109000+100000+124000+132000+120000
NOTE: Average Annual profit =
5

= 117000

7
3.2)
R
INVESTMENT (400000)
Year 1 109000
(291000)
Year 2 100000
(191000)
Year 3 124000
(67000)
Year 4 132000
3 years 6 months 2-3days

67000
× 12
132000

= 6.090909091
= 6 𝑚𝑜𝑛𝑡ℎ𝑠

0.09 × 30 = 2 − 3𝑑𝑎𝑦𝑠

3.3) No, It will not be accepted since the payback period is 3 years

8
3.4)
Year Cash Inflow Discount Present value
Factor
1 109000 0.9009 R98198
2 100000 0.8116 R81160
3 124000 0.7312 R90668.8/90670
4 132000 0.6587 R86948
5 120000 0.5935 R71220
Total PV R428194.8/428196

Investment (R400000)

R428194.8/428196-
R400000

NPV R28194.8/28196
(Positive)

3.5) Yes, NPV is positive, the project maybe accepted on financial grounds. The higher the
NPV the more acceptable the project is.