MAC2602
Assignment 1 Semester 1 2026
Unique number:
Due Date: 15 April 2026
This document includes:
Helpful answers and guidelines
Detailed explanations and/ or calculations
References
Connect with the tutor on
+27 81 278 3372
, QUESTION 1
A1: Eight ESG Factors Evident from the Scenario
1. Economic – High Unemployment and Low Household Income
Limpopo Province has high unemployment and low income levels. This reduces
consumers’ ability to buy products, especially higher-priced organic juices. This can
negatively affect sales volumes and profitability.
2. Economic – Dependence on a Single Foreign Supplier
The company depends heavily on a supplier from China for plastic bottles. This
creates risk due to exchange rate changes, shipping delays or political issues, which
can disrupt production.
3. Social – Job Creation Opportunities
Building a local plastic manufacturing facility can create jobs in a province with high
unemployment. This supports social development and may attract government
support.
4. Social – Credit Risk from Low-Income Customers
A large portion of sales is made on credit to customers in a low-income area. This
increases the risk of late payments and bad debts, affecting cash flow.
5. Environmental – Water Supply Challenges
The municipality has ongoing water supply issues. Since water is essential for
production, this creates a serious operational risk and may interrupt production.
© Study Shack 2026. All rights Reserved +27 81 278 3372
, 6. Environmental – Use of Plastic Bottles
The use of plastic packaging raises environmental concerns such as pollution and
waste. This may result in stricter regulations and reputational risk for the company.
7. Environmental – Environmental Impact Assessment Requirement
The company must complete an environmental assessment before construction.
This reflects legal compliance and environmental responsibility.
8. Governance – ISO Compliance Requirements
The company must comply with ISO standards before starting manufacturing. This
ensures quality and safety but also adds compliance costs and governance
responsibilities
QUESTION 2
A2: NPV Calculation
Initial outlay
Item Amount (R)
Cost of facility (including machines) (10 000 000)
Environmental assessment (not capitalised) (150 000)
ISO compliance costs (not capitalised) (200 000)
© Study Shack 2026. All rights Reserved +27 81 278 3372
Assignment 1 Semester 1 2026
Unique number:
Due Date: 15 April 2026
This document includes:
Helpful answers and guidelines
Detailed explanations and/ or calculations
References
Connect with the tutor on
+27 81 278 3372
, QUESTION 1
A1: Eight ESG Factors Evident from the Scenario
1. Economic – High Unemployment and Low Household Income
Limpopo Province has high unemployment and low income levels. This reduces
consumers’ ability to buy products, especially higher-priced organic juices. This can
negatively affect sales volumes and profitability.
2. Economic – Dependence on a Single Foreign Supplier
The company depends heavily on a supplier from China for plastic bottles. This
creates risk due to exchange rate changes, shipping delays or political issues, which
can disrupt production.
3. Social – Job Creation Opportunities
Building a local plastic manufacturing facility can create jobs in a province with high
unemployment. This supports social development and may attract government
support.
4. Social – Credit Risk from Low-Income Customers
A large portion of sales is made on credit to customers in a low-income area. This
increases the risk of late payments and bad debts, affecting cash flow.
5. Environmental – Water Supply Challenges
The municipality has ongoing water supply issues. Since water is essential for
production, this creates a serious operational risk and may interrupt production.
© Study Shack 2026. All rights Reserved +27 81 278 3372
, 6. Environmental – Use of Plastic Bottles
The use of plastic packaging raises environmental concerns such as pollution and
waste. This may result in stricter regulations and reputational risk for the company.
7. Environmental – Environmental Impact Assessment Requirement
The company must complete an environmental assessment before construction.
This reflects legal compliance and environmental responsibility.
8. Governance – ISO Compliance Requirements
The company must comply with ISO standards before starting manufacturing. This
ensures quality and safety but also adds compliance costs and governance
responsibilities
QUESTION 2
A2: NPV Calculation
Initial outlay
Item Amount (R)
Cost of facility (including machines) (10 000 000)
Environmental assessment (not capitalised) (150 000)
ISO compliance costs (not capitalised) (200 000)
© Study Shack 2026. All rights Reserved +27 81 278 3372
