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FIN3701 ASSIGNMENT 1 SEMESTER 2 - 2024 (232195)

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FIN3701 ASSIGNMENT 1 SEMESTER 2 - 2024 UNIQUE NUMBER: 232195 DUE DATE: 20 AUGUST 2024 QUESTION 1. REQUIRED: 1.1 Calculate the NPV for each of the three projects. (9 marks) 1.2 Calculate the annualised net present value (ANPV) of each machine. 1.3 Based on the NPV and IRR calculated above, would you advise Batlokwa (Pty) Ltd to invest their funds in the replacement? Give a reason for your answer. (2 marks) QUESTION 2. REQUIRED: 2.1 Calculate the cost of capital structure: ordinary shares, preference shares and cost of debt. (8 marks) 2.2 Calculate the weighted average cost of capital (WACC) for the company. (2 marks) QUESTION 3. REQUIRED: 3.1 Calculate the proceeds from the sale of current equipment. (4 marks) 3.2 Calculate the initial investment. (3 marks) 3.3 Calculate the operating cash flow and terminal cash flow. (13 marks)

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Institution
University Of South Africa (Unisa)
Course
Financial Management (FIN3701)










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Lawrence J Gitman, Roger Juchau, Jack Flanagan Principles of Managerial Finance
  • 2015
  • 9781442536425
  • Unknown

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Institution
University of South Africa (Unisa)
Course
Financial Management (FIN3701)
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Uploaded on
July 30, 2024
Number of pages
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Written in
2023/2024
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  • fin3701 assignment 1 semester 2 2024

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FIN3701
ASSIGNMENT 01
SEMESTER - 2
DUE DATE: 20 AUGUST




2024


"Elevate Your Excellence: Where Distinction Meets Assurance in Every Assignment!"

, FIN3701 ASSIGNMENT 1 SEMESTER 2 – 2024

UNIQUE NUMBER: 232195

DUE DATE: 20 AUGUST 2024




© FIN3701 1

, QUESTION 1.

REQUIRED:

1.1 Calculate the NPV for each of the three projects. (9 marks)

NPV Calculation:

a. Machine A: NPV = (𝑅42 663.11)
b. Machine B: NPV = 𝑅6 646.58
c. Machine C: NPV = (𝑅3 160.52)




1.2 Calculate the annualised net present value (ANPV) of each machine. (9 marks)

ANPV Calculation:

a. Machine A: ANPV = 𝑅10 377.79 ≈ (𝑅10 378)
b. Machine B: ANPV = 𝑅2 188.53 ≈ 𝑅2 189
c. Machine C: ANPV = 𝑅876.76 ≈ (𝑅877)




1.3 Based on the NPV and IRR calculated above, would you advise Batlokwa (Pty) Ltd to
invest their funds in the replacement? Give a reason for your answer. (2 marks)




FULL CALCULATIONS SHOWN ON THE NEXT PAGE




© FIN3701 2
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