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.

a. The table below gives information extracted from the annual financial statements of Management plc for the past year. Calculate the length of the operating cycle (assuming 365 days in the year). b. Highlight four problems with the use of financial ratios as a measure of performance measurement for an organisation.(8 marks)

2- (20 pts.) The direct labor cost of making airplanes decreases with repetition (learning curve). As a result, the cost of manufacturing of airplanes depend on the unit production number (first, fifth, 10th, 50th, etc.). The following data shows the direct labor cost for selected production numbers.

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.

4. See Roblox spreadsheet attached. Calculate and interpret the following: a. NOPAT b. ROIC C. EVA

A company is considering an investment proposal that will require the purchase of $80,000 of machinery and an initial investment in working capital of $40,000. The proposal is expected to yield cash flows and income (before depreciation and taxes) of $48,000 annually for four years. Depreciation is to be taken for tax purposes using the straight-line method and no salvage value. The investment in working capital will be recovered at the end of four years. The company will not accept a proposal that will not earn at least 15%. The present value of an annuity of $1 for four periods at 15% is 2.85498; the present value of $1 due in four periods at 15% is 0.57175. The tax rate in effect is 40%. Determine whether the project is acceptable using the net present value method.