MAC3702 ASSIGNMENT 2 2025
DISCLAIMER: THIS IS NOT AN OFFICIAL GUIDE FROM UNISA. THE REPORT IS
NOT PREPARED NOR APPROVED BY UNISA, RATHER REPRESENTS A
POSSIBLE SOLUTION TO THE TASK CONSISTENT WITH THEORY OF MAC3702.
THIS REPORT IS INTENDED TO ASSIST STUDENTS IN GETTING STARTED WITH
THEIR ASSIGNMENT, AND IN NO CASE THIS DOCUMENT SHOULD BE USED
FOR CHEATING. WE BELIEVE THIS WILL BE A GOOD STARTING POINT AS IT
WAS PREPARED BY OUR TEAM OF PROFESSIONAL PRIVATE TUTORS WHO
ARE EXPERTS IN THE FIELD, AND IT WAS PREPARED USING VARIOUS
SOURCES. ANY SIMILARITY WITH ANY EXISTING THEORY OR DISCUSSION BY
OTHER AUTHORS IS EXCUSED. THE AUTHORS HOWEVER DO NOT CLAIM
MONOPOLY TO KNOWLEDGE HENCE MODIFICATION OF THE ANSWERS
CONTAINED IN THIS FRAMEWORK MAY NOT BE PROHIBITED AS IT
CONTRIBUTES TO EXPANSION OF KNOWLEDGE. FOR ANY FURTHER
GUIDELINE ABOUT THE INFORMATION CONTAINED HERE AND THE MODULE
IN GENERAL, CONTACT PASSMATE TUTORIALS.
WE ASSIST WITH OTHER MODULES INCLUDING:
ECSs, FACs, MACs, MNGs, INTs, TRLs, HMEMS, PRMs, PROs, MNBs, DSC, QMI,
MNMs, MNO, MNPs, FIN, PUBs, MNMs, RESEARCH among others.
WE OFFER CLASSES, ASSIGNMENT GUIDELINES, EXAMINATION
PREPARATION, RESEARCH AND RESEARCH PROPOSALS, DISSERTATION
EDITING etc.
OTHER THAN UNISA, WE ALSO ASSIST STUDENTS AT VARIOUS INSTITUTIONS
INCLUDING MANCOSA, REGENT, REGEYNESES, BOSTON, STADIO, OLG, UJ,
UP etc
For any enquiries the following numbers can be used for calling, sms, whatsapp and
telegram
CONTACT PASSMATE TUTORIALS @061 262 1185/068 053 8213/0717 513 144 or
email
,MAC3702 ASSIGNMENT 2 2025
QUESTION 1
Table Format
Year Cash Flow (R) Discount Factor @16% Present Value (R)
0 -805 000 000 1.0000 -805 000 000
1 415 809 000 0.8621 358 467 738.90
2 424 308 870 0.7432 315 346 351.78
3 436 323 986.10 0.6407 279 552 177.79
4 451 144 743.183 0.5523 249 167 201.16
5 617 744 013.725 0.4761 294 107 624.93
NPV 691 641 094.56
Rounded to nearest rand: NPV = R691,641,095
Advice: Since the NPV is positive, GlucoCare Limited should purchase the new
machinery.
Question b)
Quantitative Factors In addition to the NPV calculation, the board has to conduct
sensitivity analysis to establish how changes in significant variables such as
production costs, sales volume, or rates of inflation would influence project returns. It
also needs to check the payback period to approximate the liquidity risk of the project
and ensure the internal rate of return (IRR) is greater than the company's cost of
, MAC3702 ASSIGNMENT 2 2025
capital. Also before the board for consideration are future financing costs and tax
implications, including capital allowances sustainability and possible alteration in
corporation tax policy.
Qualitative Factors
The rapid speed of technological change in healthcare means there is a risk that the
new machines will become obsolete before their useful life can be exhausted.
Conformity with regulations is yet a further major factor; agency failures or refusals of
approval from bodies like SAHPRA can disrupt manufacturing and sale. The
company's reputation is also in jeopardy product failures or recalls could ruin patient
and healthcare professional trust, and success would further solidify GlucoCare's
name and reputation. Finally, availability of trained operators for the automated
devices may require additional training expenditures.
Strategic Factors
The investment strongly aligns with GlucoCare’s mission to improve affordability and
accessibility of diabetes management, potentially solidifying its market leadership. The
project may also create a competitive advantage through lower production costs,
enabling more aggressive pricing. The positive relationship with the National
Department of Health could lead to further opportunities for collaboration or funding.
Scalability is another important consideration; if demand grows, the machinery could
help the company expand into other African markets. Moreover, this investment might
raise entry barriers for competitors and create options for diversifying into other
medical devices in the future.
Question c) Calculate the weighted average cost of capital (WACC) of GlucoCare
Limited based on market values at 31 May 2025 before the acquisition of the new
automated assembly machinery. [Round rand amounts to the nearest cent and
other numbers to two decimal places]
To calculate the Weighted Average Cost of Capital (WACC) for GlucoCare Limited
based on market values as of 31 May 2025, we need to determine the cost of each
component of capital (ordinary shares, preference shares, and debt) and their
respective weights in the total capital structure. The WACC formula is:
DISCLAIMER: THIS IS NOT AN OFFICIAL GUIDE FROM UNISA. THE REPORT IS
NOT PREPARED NOR APPROVED BY UNISA, RATHER REPRESENTS A
POSSIBLE SOLUTION TO THE TASK CONSISTENT WITH THEORY OF MAC3702.
THIS REPORT IS INTENDED TO ASSIST STUDENTS IN GETTING STARTED WITH
THEIR ASSIGNMENT, AND IN NO CASE THIS DOCUMENT SHOULD BE USED
FOR CHEATING. WE BELIEVE THIS WILL BE A GOOD STARTING POINT AS IT
WAS PREPARED BY OUR TEAM OF PROFESSIONAL PRIVATE TUTORS WHO
ARE EXPERTS IN THE FIELD, AND IT WAS PREPARED USING VARIOUS
SOURCES. ANY SIMILARITY WITH ANY EXISTING THEORY OR DISCUSSION BY
OTHER AUTHORS IS EXCUSED. THE AUTHORS HOWEVER DO NOT CLAIM
MONOPOLY TO KNOWLEDGE HENCE MODIFICATION OF THE ANSWERS
CONTAINED IN THIS FRAMEWORK MAY NOT BE PROHIBITED AS IT
CONTRIBUTES TO EXPANSION OF KNOWLEDGE. FOR ANY FURTHER
GUIDELINE ABOUT THE INFORMATION CONTAINED HERE AND THE MODULE
IN GENERAL, CONTACT PASSMATE TUTORIALS.
WE ASSIST WITH OTHER MODULES INCLUDING:
ECSs, FACs, MACs, MNGs, INTs, TRLs, HMEMS, PRMs, PROs, MNBs, DSC, QMI,
MNMs, MNO, MNPs, FIN, PUBs, MNMs, RESEARCH among others.
WE OFFER CLASSES, ASSIGNMENT GUIDELINES, EXAMINATION
PREPARATION, RESEARCH AND RESEARCH PROPOSALS, DISSERTATION
EDITING etc.
OTHER THAN UNISA, WE ALSO ASSIST STUDENTS AT VARIOUS INSTITUTIONS
INCLUDING MANCOSA, REGENT, REGEYNESES, BOSTON, STADIO, OLG, UJ,
UP etc
For any enquiries the following numbers can be used for calling, sms, whatsapp and
telegram
CONTACT PASSMATE TUTORIALS @061 262 1185/068 053 8213/0717 513 144 or
,MAC3702 ASSIGNMENT 2 2025
QUESTION 1
Table Format
Year Cash Flow (R) Discount Factor @16% Present Value (R)
0 -805 000 000 1.0000 -805 000 000
1 415 809 000 0.8621 358 467 738.90
2 424 308 870 0.7432 315 346 351.78
3 436 323 986.10 0.6407 279 552 177.79
4 451 144 743.183 0.5523 249 167 201.16
5 617 744 013.725 0.4761 294 107 624.93
NPV 691 641 094.56
Rounded to nearest rand: NPV = R691,641,095
Advice: Since the NPV is positive, GlucoCare Limited should purchase the new
machinery.
Question b)
Quantitative Factors In addition to the NPV calculation, the board has to conduct
sensitivity analysis to establish how changes in significant variables such as
production costs, sales volume, or rates of inflation would influence project returns. It
also needs to check the payback period to approximate the liquidity risk of the project
and ensure the internal rate of return (IRR) is greater than the company's cost of
, MAC3702 ASSIGNMENT 2 2025
capital. Also before the board for consideration are future financing costs and tax
implications, including capital allowances sustainability and possible alteration in
corporation tax policy.
Qualitative Factors
The rapid speed of technological change in healthcare means there is a risk that the
new machines will become obsolete before their useful life can be exhausted.
Conformity with regulations is yet a further major factor; agency failures or refusals of
approval from bodies like SAHPRA can disrupt manufacturing and sale. The
company's reputation is also in jeopardy product failures or recalls could ruin patient
and healthcare professional trust, and success would further solidify GlucoCare's
name and reputation. Finally, availability of trained operators for the automated
devices may require additional training expenditures.
Strategic Factors
The investment strongly aligns with GlucoCare’s mission to improve affordability and
accessibility of diabetes management, potentially solidifying its market leadership. The
project may also create a competitive advantage through lower production costs,
enabling more aggressive pricing. The positive relationship with the National
Department of Health could lead to further opportunities for collaboration or funding.
Scalability is another important consideration; if demand grows, the machinery could
help the company expand into other African markets. Moreover, this investment might
raise entry barriers for competitors and create options for diversifying into other
medical devices in the future.
Question c) Calculate the weighted average cost of capital (WACC) of GlucoCare
Limited based on market values at 31 May 2025 before the acquisition of the new
automated assembly machinery. [Round rand amounts to the nearest cent and
other numbers to two decimal places]
To calculate the Weighted Average Cost of Capital (WACC) for GlucoCare Limited
based on market values as of 31 May 2025, we need to determine the cost of each
component of capital (ordinary shares, preference shares, and debt) and their
respective weights in the total capital structure. The WACC formula is:
