Exam (elaborations)

Exam (elaborations) MAC3702 - Application Of Financial Management Techniques (MAC3702)

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Exam (elaborations) MAC3702 - Application Of Financial Management Techniques (MAC3702) EXAM MEMO MAYJUNE 2022

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exam elaborations mac3702 application of financial management techniques mac3702exam memo may june 2022

TheEconomist Member since 4 year 602 documents sold

MAC3702
SEPT 2022

UNIVERSITY EXAMINATIONS

FI CONCESSION EXAM OPPORTUNITY
19 SEPTEMBER 2022

MAC3702
Application of Financial Management Techniques

100 Marks
Duration 3 Hours
45 minutes for uploading (submission cut-off time at 20:00 myUnisa time)

THIS PAPER CONSISTS OF THIRTEEN (13) PAGES IN TOTAL.
THIS IS NOT AN OPEN BOOK EXAM! YOU ARE NOT ALLOWED TO COPY FROM
ANY SOURCES INCLUDING YOUR TEXTBOOK OR TUTORIAL LETTERS.

EXAM QUESTION PAPER - INSTRUCTIONS:
Please note:
1. This paper consists of ONE (1) question.
2. You are strongly advised to carefully read the required before attempting the
questions concerned.
3. All question sections must be answered.
4. All calculations must be shown.
5. Each question section attempted, must commence on a new (separate) page.
6. Include (write/type) your student number in the document/answer file.

PROPOSED TIMETABLE FOR THIS EXAM:

CONTENTS
TIME
QUESTION TOPICS MARKS
Minutes
1 Valuations, mergers and acquisitions, Advanced
analysis of information, Quantitative and
qualitative considerations, Weighted average 100 180
cost of capital, Ethics, Sources of finance and
Ethics
TOTAL 100 180

1

CONFIDENTIAL

, MAC3702
SEPT 2022

QUESTION (100 marks; 3 hours)

Zip (Pty) Ltd (“Zip”) is a South African transport service company that was founded in 2018 by
two friends. The company has a 31 August year end.

Zip offers e-hailing services (the ordering of transportation via a device such as a laptop or
smart phone. This is a new way of arranging a taxi-type service) and ride sharing services
(sharing a vehicle/form of transport with another passenger to the same, or close by
destination) (like Uber) to citizens of the cities and towns in which their service operates. Zip
does not own any vehicles, but contracts independent drivers to sign-up as Zip drivers using
their own vehicles to offer Zip’s e-hailing and ride sharing services.

Zip is one of many companies that entered the transport industry in the last decade and
changed the way the industry operates by introducing this disruptive technology (an innovation
that significantly alters the way that consumers, industries, or businesses operate).

The core of Zip’s business is an app that matches Zip drivers with Zippers (users of Zip’s
services who need to travel). In addition to e-hailing, the app also makes it possible for users
to find other passengers travelling to similar destinations who want to div-Zip (ride share).
Thus, instead of each user renting a separate vehicle, one vehicle can be shared with several
passengers travelling to a similar destination.

Zip experienced rapid growth since it started operating. The company now operates in over
25 cities and towns in South Africa, including all major centres (i.e., Cape Town, Durban, East
London, Johannesburg etc.).

2

CONFIDENTIAL

, MAC3702
SEPT 2022

Zip’s business is based on the following core principles:

1. Improving South Africans’ mobility.
2. Safeguarding the sustainability of the environment (i.e., less carbon emissions) by
decreasing the need for citizens to own vehicles.
3. Enabling cost savings for South Africans (e.g., by means of ride sharing and not
owning a vehicle).

These principles support the company’s overarching vision:

“We want to make life easier for communities across the country by connecting transport with
technology. We want South Africans to be mobile in a connected way.”

Rise of mobility-as-a-service (MaaS) businesses

For Zip to remain competitive in the industry and increase its future growth prospects, the
directors are looking for ways to expand their service offering to move towards becoming
South Africa’s first mobility-as-a-service (MaaS) business, which they believe is in line with
the company’s vision and core principles. MaaS businesses offer a diverse range of transport
options, including (but not limited to) public transport, micro-mobility transport options (Micro-
mobility refers to lightweight and small vehicles that run at speeds below 25 kilometres per
hour such as scooters, segways, electric skateboards etc.), cycling, ride or bike-sharing, taxi,
and car rental. MaaS is not limited to transport options for individuals and could also include
the transport of goods (for example, a courier service).

Globally, transport has historically been car-centric, meaning for people to be mobile they
needed to own a car. This was especially true in countries where public transport systems are
unreliable. Considering the effect of urbanisation and the increase in the proportion of people
living in towns and cities when compared to rural (non-urban) areas, which is causing cities to
become more densely populated, as well as growing concerns by governments and social
interest groups regarding the climate crises, a car-centric transport model is no longer practical
or sustainable. Thus, globally there has been a shift towards MaaS businesses to meet
transport needs.

The greatest benefit of using the services of a MaaS business is that you can access various
forms of transport through a single app and a single payment channel (instead of using various
3

CONFIDENTIAL

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