Exam (elaborations)
MAC3702 ASSESSEMENT 2 SEM 2 OF 2024 EXPECTED QUESTIONS AND ANSWERS
- Course
- Institution
THIS DOCUMENT CONTAINS CAREFULLY CALCULATED SOLUTIONS TO THE MAC3702 ASSESSMENT 2 OF SEM 2 2024. USE IT CAREFULLY AS A GUIDE
[Show more]
Seller
Follow
oscardiura
Reviews received
Content preview
OSCAR THE TUTORoscardiura@gmail.com
+27737560989
for FAC MAC ECS DSC TAX QMI FIN INV BNU STA
tutorials
, Question 1
Lesidi is considering making a bid for Bafifi. Bafifi has 10 million shares in issue. The following
information relating to Bafifi is provided
2023 2024 2025 2026
actual Forecast Forecast Forecast
Year 1 Year 2 Year 3 Year 4
Revenue 260,000.00 291,000.00 311,370.00 333,165.90
Cost of sales (125,000.00) (174,720.00) (171,253.50) (160,175.91)
Gross Profit 135,000.00 116,280.00 140,116.50 172,989.99
Other Operating expenses (40,000.00) (46,000.00) (48,300.00) (50,715.00)
Depreciation (23,000.00) (23,000.00) (23,000.00) (23,000.00)
Profit from Operations 72,000.00 47,280.00 68,816.50 99,274.99
Finance Cost (24,000.00) (10,000.00) (10,000.00) (10,000.00)
Profit before tax 48,000.00 37,280.00 58,816.50 89,274.99
Taxation – 27% (12,960.00) (10,065.60) (15,880.46) (24,104.25)
Profit after tax 35,040.00 27,214.40 42,936.05 65,170.74
1 2 3
Profit after tax 27,214.40 42,936.05 65,170.74
Add back Depreciation 23,000.00 23,000.00 23,000.00
Terminal Value =( 65,170.74
+23000)* (1 + 0.05) / (0.165 -
0.05) 805,037.19
Free cashflow to the firm 50,214.40 65,936.05 893,207.93
Discount @16.5% 0.86 0.74 0.63
Present Values 43,102.49 48,581.51 564,904.19
Total Value 656,588.19
c)
Focus on Cash Flows: This method directly considers the cash generated by the company,
which is a fundamental measure of its financial health and ability to generate value for
shareholders.
Flexibility: It can be applied to various types of companies, regardless of their capital
structure or industry.
Account for Growth: The terminal value calculation incorporates a growth rate, which
reflects the company's expected future performance.
Simplicity: While the calculations can be complex, the underlying concept is relatively
straightforward, making it easier to understand and explain.
d)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller oscardiura. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.24. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52355 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now