Programme BACHELOR OF COMMERCE IN MBM FULL TIME

Module FINANCE FOR MARKETING

Module Code FMK310 24_HE_FT_DG_FMK310_Y3
NQF Level 7
Credits 10
Assessment Individual Assignment
Type
Semester 1
Due Date 26 March 2024

Total marks 50
Pass mark 50%
Weighting 15%
Examiner MUNYARADZI TSATSA
Moderator MANDHLA NALITI

This Question paper consists of 05 pages including the cover page.

INSTRUCTIONS:
Read the following instructions CAREFULLY:
1. Assignments must be presented in the correct format. Your assignment

should be typed –Arial font 12; 1.5 spacing; Justified (ctrl + J))
2. Ensure that your details and the name of your campus are clearly indicated
on the cover pageof your assignment.
3. Please note that it is your responsibility to retain copies of your assessments.
4. Use the Harvard method of Referencing for citing your sources.
5. Use current research sources, preferably not older than five years.
6. A Check for Plagiarism report MUST be attached to each assignment submission.
7. It is in your own interest to present your work neatly.

Damelin© Individual Assignment Page 1 of 5

Question 1 (OVERVIEW OF FINANCIAL MANAGEMENT) (10 marks)
1.1 Discuss the agency shareholder conflict [5] Marks]
1.2 For what three basic reasons is profit maximization inconsistent with wealth
maximization? [5 Marks]

Question 2 (TIME VALUE OF MONEY) (20 marks)

2.1 NEDBANK offers an investment account which requires a minimum investment of
R40 000. The account offers an interest rate of 10% per year, interest compounded
semi-annually.
What is the annual effective interest rate? [5 Marks]
Use the following formula.
𝑟𝑒 = (1 + 𝑟 )𝑚 – 1
𝑚

2.2 Tshiamo has just recently purchased equipment that is worth for R10 000 000 on credit.
The supplier of the equipment has given a loan at an interest rate of 15% per year
interest compounded annually and repayable in equal instalments over 5 years.
Required
2.2 What is the annual instalment? (Calculate PMT) [5 Marks]
Use the following formula
(1−(1+𝑟)−𝑛
Present Value of Annuity (PVA) = PMT [( ]
𝑟

Round off payments to 2 decimal place.

2.3 Prepare an amortization schedule to show the running balance over a period of 5 years.
[10 Marks]
For (ii) use the following table for loan amortization schedule
Beginning Payment Interest End Balance
Year Balance

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 Question 3 (CAPITAL BUDGETING ) (20 marks)

Munya Tsatsa (Pty) Ltd has R1 500 000 available for investment and must choose
between the following two divisible projects:
Year Cash Flow Cash Flow
Project A (RAND) Project B (RAND)

0 (1 000 000) (1 200 000)

1 250 000 400 000

2 300 000 400 000

3 350 000 400 000

4 420 000 400 000

5 450 000 400 000

The company’s cost of capital for the company is 12%. (Ignore tax)
Rounded your discount factor to 2 decimal place and use a table like below for the
tabulation of the Net Present value for each project.
Year Cash Flow for Discount Factor Present value
Project A @12%
0 1
1 0.8929

Required
3.1 Calculate the Net Present Value (NPV) of each project and recommend which
project the management of Munya Tsatsa (Pty) should invest the R1 500 000 for the
company to maximise its shareholder’s wealth. [15
marks]
3.2 What are the advantages and disadvantages of using Net Present value method to
evaluate the projects [5 marks]

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 Individual Assignment
Cover Sheet

Student’s name

Student number
Name of
Campus
Year of Study Semester

Programme
Module
Module Name
Code
Lecturer
Date
Due date submitted

KEEP A COPY
Please note that it is your responsibility to retain copies of your assessments.

A CheckforPlagiarism report MUST be attached to each assignment submission.

Damelin© Individual Assignment Page 4 of 5

 DECLARATION BY STUDENT

I, the undersigned declare that:

• I have retained a copy of this assessment.
• I understand what plagiarism is and are aware of the Damelin’s policy in this
regard.
• The work hereby submitted is my original work, gathered and utilised to fulfil the
requirements of this assignment except for source material explicitly
acknowledged.
• I have not used work previously produced by another student or any other persons
to hand in as my own.
• I have not allowed, and will not allow, anyone to copy my work with the intention
of passing it off as their own work.

Signature of Student Date

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