a. What is the estimated life of the new machine? b. Compute the payback period for the new machine; ignore income taxes. c. Assume the same data as given above except that the repair costs on the new machine are expected to increase by $9,600 per year. Compute the payback period for the new machine.

a. Distinct between Systematic Risk (Market Risk) and Unsystematic Risk. b. Compare and contrast preference shares with ordinary shares.

P17-31. Special Order Razor USA produces a variety of electric scooters. Assume that Razor has just received an order from a customer (Pulse Cycles) for 500 Power Core scooters. The following price, based on cost plus a 60% markup, has been developed for the order:

a. On 4 January 2020 Thabo deposited P7 800 into savings account. The simple interest rate agreed upon was 6.2% per annum. What will be accumulated amount in the savings account on 21 November 2020? (Assume a year has 365 days). b. Joanna has taken an endowment policy that matures in 30 years. The expected interest rate per year is 11.15%. Her annual payment (at the end of each year) isP8000. Calculate: i.The present value of the policy(4 ii.The future value of the policy c. Find the value of $10,000 in 10 years. The investment earns 8% for four years and then earns 4% for the remaining six years.(4 marks) d. P1 400 was left in an investment account for 20 years and it earned 12.5% per-year compounded half-yearly. Calculate the value of the investment after 20 years.

a. A finance manager plays a key role in the organization. Explain any four functions of a financial manager to support the statement.(12 marks) b. Wealth management is a more reasonable argument for financial management than profit maximization. Discuss.(8 marks)

A hospital is considering to purchase a diagnostic machine costing P800 000. The projected life of the machine is 8 years and has an expected salvage value of P60 000 at the end of 8 years. The annual operating cost of the machine is 75 000. It is expected to generate revenues of P 400 000 per year for eight years. Presently, the hospital is outsourcing the diagnostic work and earning commission income of P120 000 per annum; net of taxes. a. Advise the hospital management whether it would be profitable to purchase the machine, basing your recommendation under: i.Net Present Value Method ii. Profitability Index Method b. What are the relative merits and demerits of the following investment appraisal techniques and what conclusions would you therefore draw about their relative attractiveness? i.Payback period; and ii.Accounting Rate of Return.

The following information is available for two firms, Cheetah Limited and Lion Limited. a. Calculate the market values of equity, debt and firm for both Cheetah Limited and Lion Limited.(8 marks) b. What is the Weighted Average Cost of Capital (WACC) for each of the two firms? c. What happens to the average cost of Cheetah Limited if it employs $30 million of debt to finance a project that yields an operating income of $4 million? (8 marks) d. What are the likely implications for the cost of equity, and thus the WACC, if the debt increases significantly such that the long-term gearing changes? (2 marks)

a. You are thinking about investing your money in the stock market. You have thefollowing two stocks in mind: stock A and stock B. You know that the economycan either go in recession or it will boom. Being an optimistic investor, youbelieve the likelihood of observing an economic boom is two times as high asobserving an economic depression. You also know the following about your twostocks: i. Calculate the expected return for stock A and stock B. ii. Calculate the total risk (variance and standard deviation) for stock A and for stock b. A portfolio consists of the following assets with associated betas:

a. Explain the relevance of financial information to at least five (5) groups of users of financial statements.(10 marks) b. Define the term corporate governance and highlight its four (4) main objectives to an organisation.(10 marks)