[TYPE THE COMPANY NAME]
MAC3702 Assignment 2
(COMPLETE ANSWERS)
Semester 1 2026 - DUE 22
April 2026
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
MAC3702 Assignment 2 (COMPLETE
ANSWERS) Semester 1 2026 - DUE 22 April
2026
MAC3702 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 22
April 2026; 100% TRUSTED Complete, trusted solutions and explanations.
Ensure your success with us.
QUESTION 1 (69 marks) – UrbanKick
Sports Limited (UKS)
UrbanKick Sports Limited (UKS) is a sportswear company listed on the JSE. The company plans
to launch a new soccer boot called NOVA X9 and must evaluate the financial viability and
funding of this project.
🔹 REQUIRED
(a) Expected Operating Profit (10 marks)
Calculate the expected operating profit for the year ending 31 December 2025, including the
contribution from the new NOVA X9 product.
Use probabilities provided
Round to the nearest Rand
(b) Financing Decision (12 marks)
Determine how UKS should finance the purchase of the new machine, considering:
Available funding options (shares, loans, preference shares)
Current capital structure (debt: equity ratio of 1:1 using book values)
Include:
Calculations (9 marks)
, Discussion (3 marks), including:
o Cost of financing options
o Impact on control (ownership/dilution)
(c) Weighted Average Cost of Capital (WACC) (10 marks)
Calculate the WACC of UKS after financing the project, using:
Book values
Updated capital structure
Round:
Amounts → nearest Rand
Percentages → 2 decimal places
(d) Net Present Value (NPV) Analysis (21 marks)
Evaluate whether UKS should invest in the new machine using the NPV method.
Include:
Initial investment (machine + working capital)
Annual cash flows
Tax (27%)
Capital allowances (25%)
Discount rate (18%)
Scrap value
Show full calculations and conclude whether the project is viable.
(e) Discounted Payback Period (5 marks)
Calculate how long it will take to recover the initial investment using the discounted payback
method.
Use values from part (d)
MAC3702 Assignment 2
(COMPLETE ANSWERS)
Semester 1 2026 - DUE 22
April 2026
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
MAC3702 Assignment 2 (COMPLETE
ANSWERS) Semester 1 2026 - DUE 22 April
2026
MAC3702 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 22
April 2026; 100% TRUSTED Complete, trusted solutions and explanations.
Ensure your success with us.
QUESTION 1 (69 marks) – UrbanKick
Sports Limited (UKS)
UrbanKick Sports Limited (UKS) is a sportswear company listed on the JSE. The company plans
to launch a new soccer boot called NOVA X9 and must evaluate the financial viability and
funding of this project.
🔹 REQUIRED
(a) Expected Operating Profit (10 marks)
Calculate the expected operating profit for the year ending 31 December 2025, including the
contribution from the new NOVA X9 product.
Use probabilities provided
Round to the nearest Rand
(b) Financing Decision (12 marks)
Determine how UKS should finance the purchase of the new machine, considering:
Available funding options (shares, loans, preference shares)
Current capital structure (debt: equity ratio of 1:1 using book values)
Include:
Calculations (9 marks)
, Discussion (3 marks), including:
o Cost of financing options
o Impact on control (ownership/dilution)
(c) Weighted Average Cost of Capital (WACC) (10 marks)
Calculate the WACC of UKS after financing the project, using:
Book values
Updated capital structure
Round:
Amounts → nearest Rand
Percentages → 2 decimal places
(d) Net Present Value (NPV) Analysis (21 marks)
Evaluate whether UKS should invest in the new machine using the NPV method.
Include:
Initial investment (machine + working capital)
Annual cash flows
Tax (27%)
Capital allowances (25%)
Discount rate (18%)
Scrap value
Show full calculations and conclude whether the project is viable.
(e) Discounted Payback Period (5 marks)
Calculate how long it will take to recover the initial investment using the discounted payback
method.
Use values from part (d)
