Exam (elaborations)
MAC3702 Assignment 1 Semester 2 2024
- Institution
- University Of South Africa (Unisa)
MAC3702 Assignment 1 Semester 2 2024
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Assessment 1: Attempt review https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=210MAC3702-24-S2 Welcome Message Assessment 1
QUIZ
Started on Sunday, 18 August 2024, 2:42 PM
State Finished
Completed on Sunday, 18 August 2024, 3:09 PM
Time taken
Marks
out of 100.00
Question 1
Complete
Mark 1.00 out of 1.00
The following statement on the investment decision are provided:
a) Capital budgeting is another description of the investment decision.
b) If the cash �ows of an investment in an asset is equal to or greater than the
company’s required return, the investment should be accepted.
c) The only reason there will be an investment in a company is to increase the
shareholder wealth.
d) The investment decision as well as the valuation of shares is dependent on the
future cash �ows to the shareholders and shareholder’s required return.
e) The investment decision looks at the investment in an asset that yields future
cash �ows.
f) Some of the investment opportunities includes mergers and acquisitions,
restructuring and replacement of assets.
Which of the above statement on the investment decision are TRUE?
a. Options (a), (b), (d) and (f)
b. Options (b), (c) and (f)
c. Options (a), (b), (c), (d), (e) and (f)
d. Options (b), (c), (d), (e) and (f)
1 of 24 2024/08/18, 15
,Assessment 1: Attempt review https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=210
Question 2
Complete
Mark 1.00 out of 1.00
What will the present value factor of 15% be in year 3?
a. 0,4972
b. 0,5718
c. 0,6576
d. 0,8696
2 of 24 2024/08/18, 15
,Assessment 1: Attempt review https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=210
Question 3
Complete
Mark 1.00 out of 1.00
Papraika Limited (also known as “Papraika Stores”) is the largest non-food retailer in
South Africa and is listed on the Johannesburg Stock Exchange (JSE). The company
is the leading retailer of clothing, home appliances, stationery, cosmetics, accessories
and cellular products in Southern Africa with more than 3 000 retail stores, the
majority of which are in South Africa. Papraika Stores caters for different LSM groups
and also has become one of South Africa’s most trusted brands.
The recent depreciation of the rand against world’s major currencies (exacerbated by
local politics) has sent the JSE share index into a downward spiral and the
shareholders of Papraika Stores Limited have also seen a sharp decline in their
investment value in the company.
The statement of comprehensive income and the statement of �nancial position of
Papraika Stores Limited are provided below:
Statement of comprehensive income for the year ending 31 January 2022
R million Notes 2022
Revenue a 23 746
Cost of merchandise (13 252)
Gross pro�t 10 494
Other operating income 1 533
Other income b 1 106
Trading expenses c (9 037)
Net �nance costs d (1 075)
Pro�t before taxation 3 021
Taxation f ( 864)
Pro�t for the year 2 157
Statement of �nancial position as at 31 January 2022
R million Notes 2022
Non-current assets
Property, plant and equipment 3 336
Other Investments b 4 736
Goodwill 378
Current assets
Inventory 5 116
Trade and other receivables – retail 6 695
Prepayments 946
Cash and cash equivalents 888
Total assets 22 095
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Capital and reserves
Share capital 890
Non-distributable reserves 237
Retained income 8 774
Total equity 9 901
Non-current liabilities
Long-term portion of interest-bearing debt d 5 322
Deferred taxation 435
Post-retirement medical bene�ts 217
Current liabilities
Short-term portion of interest-bearing debt d 3 139
Short-term borrowings e 1 246
Trade and other payables 1 835
Total equity and liabilities 22 095
Weighted average number of shares (million) 207
Dividend – Interim (R million) 382
Dividend – Final (R million) 765
Number of retail outlets 3 125
Staff complement 21 981
Share price – closing (cents) 14 144
NOTES
a) Of the R23 746 million sales made during the year, R16 622 million were on
credit. Over the years, Papraika Stores has maintained healthy relations with its
suppliers resulting in discounts received and �exible terms of payment. Purchases for
the year amounted to R12 120 million of which 90% were sourced on credit. The gross
pro�t percentage in 2021 �nancial year was 32% (gross pro�t for the 2021 �nancial
year amounted to R9 047 million).
b) Other income relates to dividends received from investments (marketable
securities) in listed retail companies outside the country. This has decreased by
almost 4% from the previous years.
c) Trading expenses comprise of:
R million
Trading expenses
Depreciation and amortisation 465
Employee costs 3 210
Occupancy costs 2 043
Net bad debts 948
Other operating costs 2 371
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