MAC3702 Assignment 2 |ANSWERS| - DUE 22 APRIL 2026

MAC3702
Assignment 2
DUE: 22 APRIL 2026

, UNIVERSITY OF SOUTH AFRICA
MAC3702 – APPLICATION OF FINANCIAL MANAGEMENT TECHNIQUES
ASSIGNMENT 2 – SEMESTER 1, 2026
Due: 22 April 2026 at 23:00



Question Topic Marks
WACC, Capital Budgeting, Capital Structure, Working Capital
1 69
Management, Strategic Financial Decision Making
2 Financial Analysis, Valuations, and Ethics 31
TOTAL 100

, QUESTION 1 (69 MARKS)


(a) Expected Operating Profit for the Year Ending 31 December 2025 [10 marks]

Expected Operating Profit – Existing Operations


Operating Profit (R) Probability Weighted Amount (R)
1 600 000 × 0.20 320 000
1 700 000 × 0.30 510 000
1 800 000 × 0.40 720 000
2 000 000 × 0.10 200 000
Expected operating profit –
1 750 000
existing


Expected Production Quantity – Nova X9


Quantity (pairs) Probability Weighted Quantity
9 000 × 0.30 2 700
12 500 × 0.40 5 000
15 000 × 0.20 3 000
18 500 × 0.10 1 850
Expected quantity 12 550 pairs


Contribution per Pair – Nova X9


Item R per pair
Selling price 880
Less: Direct material (480)
Less: Direct labour (220)
Less: Variable overhead (55)
Contribution per pair 125


Expected Operating Profit – Nova X9


Item R
Revenue (12 550 × R880) 11 044 000
Less: Variable costs (12 550 × R755) (9 475 250)
Contribution (12 550 × R125) 1 568 750
Less: Fixed costs (450 000)