Assignment 6;Accounting and finacial Management/ MANCOSA: POSTGRADUATE DIPLOMA IN BUSINESS MANAGEMENT 58
QUESTION 1 (15)
Shanghai Limited has the choice of purchasing one of two machines viz. machine P and machine Q. Both
machines have a five-year life with no residual value. The annual volume of production for both machines is
estimated at 300 000 units, which can be sold at R12 per unit.
Depreciation is calculated on the machine using the straight-line method.
Machine P costs R4 500 000. Its annual variable costs are estimated at R400 000 (excluding depreciation). Fixed
costs are estimated at R1 900 000.
Machine Q costs R4 800 000. Its variable costs are estimated at R360 000 (excluding depreciation). Fixed costs
are estimated at R1 800 000.
The cost of capital may be assumed at 14%.
1.1 Use the net present value method to determine and justify which machine should be selected by the
1.2 Calculate the accounting rate of return for machine P. (5)
Abridged Income Statement (internal use) 2015 2014
Sales units (thousands) 200 120
Sales 18 000 12 000
Variable costs (all manufacturing) 9_QQQ m2
Contribution 9 000 5 000
Fixed Costs (80% manufacturing, 20% administration) 6_7_0_Q flop
Earnings before Interest and Tax 2 300 3 000
Interest M w
Earnings after Interest before Tax 850 2 500
Tax (30%) Q E
Earnings after Interest and Tax _5_9_5 1M
Abridged Statement of Financial Position 2015 2014
(Balance Sheet) R���OOOs R’OOOs
Fixed Assets 9 515 8 236
Current Assets 2 097 768
Inventory 445 250
Debtors 1 652 468
Cash 0 50
Total Assets 11 612 _9__Q_(_)_4
Equity and Liabilities
Ordinary share capital 3 000 3 000
Retained Income 4 007 3 412
Long Term Debt 1 735 1 634
Current Liabilities 2 870 958
Trade Creditors 1 350 958
Overdraft 1 520 0
Total Equity and Liabilities 11 612 9 004
PROGRAMME HANDBOOK: JULY 2016 INTAKE
Our Service Charter
Excellent Quality / 100% Plagiarism-FreeWe employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers.
Free RevisionsWe keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed.
Confidentiality / 100% No DisclosureWe make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service.
Money Back GuaranteeIf the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit.
24/7 Customer SupportWe have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.