FIN3701 Assignment 1 (COMPLETE ANSWERS) Semester 1 2026 - DUE 30 March 2026;100% trusted ,comprehensive and complete reliable solution with clear explanation.

, FIN3701 Assignment 1 (COMPLETE ANSWERS) Semester 1 2026
- DUE 30 March 2026;100% trusted ,comprehensive and complete
reliable solution with clear explanation.



Question 1 – Bottling Ltd

Given Data:

 Consultant fee (sunk cost) = R14,000
 Machine cost = R120,000
 Two moulds = R22,000
 Depreciation: straight-line over 2 years
 Salvage value = 23% of machine cost = 0.23 × 120,000 = R27,600
 Sales: Year 1 = R80,000; Year 2 = R80,000 × (1 – 0.10) = R72,000
 Fixed costs = R4,500 per year
 Variable costs = 15% of sales
 Plastic material = R1,200 (R1,000 financed via overdraft)
 Tax = 29%
 Cost of capital = 10%

Note: The consultant fee is sunk, so it is not included in initial
investment.


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𝑭𝒐𝒓𝒎𝒖𝒍𝒂: