, FIN3701 Assignment 1 Semester 1 2026 (224276) - DUE 30 March 2026
QUESTION 1
1.1 Initial Investment
Calculation
Item Amount (R)
Machine 120 000
Two moulds 22 000
Working capital (plastic material) 1 200
Total Initial Investment 143 200
Consultant fee = sunk cost → Excluded
Initial Investment = R143 200
1.2 Operating Cash Inflows
(Using after-tax operating cash flow method)
Step 1: Depreciation
Salvage value = 23% × 120 000 = 27 600
Depreciable amount = 120 000 − 27 600 = 92 400
Annual depreciation = 92 400 ÷ 2 = 46 200
QUESTION 1
1.1 Initial Investment
Calculation
Item Amount (R)
Machine 120 000
Two moulds 22 000
Working capital (plastic material) 1 200
Total Initial Investment 143 200
Consultant fee = sunk cost → Excluded
Initial Investment = R143 200
1.2 Operating Cash Inflows
(Using after-tax operating cash flow method)
Step 1: Depreciation
Salvage value = 23% × 120 000 = 27 600
Depreciable amount = 120 000 − 27 600 = 92 400
Annual depreciation = 92 400 ÷ 2 = 46 200