Question 1
Gabi wishes to purchase an apartment in Berea Johannesburg which is situated in a quiet street. The purchase price, including costs, is R355 000 and she wishes to get a 100% mortgage bond at an interest rate of 6%, interest compounded monthly. The term of the loan is 20 years. Property economists have suggested that property values are expected to rise at a rate of 9% per year. Gabi will be able to rent out the apartment after costs at a rate of R2 000 per month. Interest and rent are payable at the beginning of each month.
Required:
1.1 Evaluate the expected value of the apartment in 20 years' time.
1.2 What is the mortgage loan repayment at the beginning of each month?
1.3 What is the net amount Gabi has to pay in each month, if any?
Question 2
2.1 Differentiate between Ordinary shares and Preference shares.
2.2 Illustrate three characteristics that any security for a loan should have.
Question 3
The expected return and risk involved in making an investment are important factors considered by investors. The expected return of a business can be influenced by many factors. Past performance is considered to reflect expected future performance and an equal probability of 25% is assumed for all returns. Based on the analysis of past returns and forecasting, the following information is available for returns on two shares
listed on the stock exchange:
|
Year
|
Mazebe
|
Baduna
|
|
2009
|
0.20
|
0.16
|
|
2010
|
0.28
|
0.12
|
|
2011
|
0.36
|
0.10
|
|
2012
|
0.12
|
0.18
|
Required:
3.1 Calculate the average return for each of the two shares.
3.2 Calculate the risk involved by use of the standard deviation of each of the two shares.
3.3 Calculate the co-efficient of variation of each of the two shares.
Question 4
Study the following Goget financial statements and answer the questions below.
Statement of Comprehensive Income for the year ended 31 Dec 2012
31 Dec 11 31 Dec 12
Sales 4 005 153 4 440 654
Cost of sales 1 968 238 2 105 827
Gross Profit 2 036 915 2 334 827
|
Expenses
|
992 086
|
1 134 525
|
|
Selling & Distribution costs
|
421 969
|
499 931
|
|
Marketing expenses
|
130 026
|
163 708
|
|
Research and development
|
64 472
|
65 287
|
Fixed and admin expenses 375 619 405 599
|
Operating Profit
|
1 044 829
|
1 200 302
|
|
Finance Income
|
38 680
|
59 288
|
|
Finance costs
|
-56 411
|
-40 473
|
|
Dividend Income
|
9 619 10 647
|
|
Profit before tax and abnormal items
|
1 036 717 1 229 764
|
|
Abnormal item
|
- 269 000
|
|
Taxation
|
246 835 317 536
|
|
Net Profit after tax
|
789 882 643 228
|
Dividend - -
Retained Earnings 789 882 643 228
Capital and Reserves
|
Issued Share Capital
|
17 363
|
17 365
|
|
Share premium
|
1 203 854
|
1 190 290
|
|
NDR
|
77 494
|
349 061
|
|
Retained Earnings
|
1 001 942 1 357 939
|
|
Total shareholders Equity
|
2 300 653 2 914 655
|
|
Non-controlling interest
|
24 943 158 685
|
Total Equity 2 325 596 3 073 340
|
Long-term Loan
Other long-term liabilities
|
117 076
20 981
|
453 830
39 769
|
|
Non-Current Liabilities
|
138 057
|
493 599
|
|
Bank Overdraft
|
221
|
-
|
|
Trade payables
|
630 743
|
957 922
|
|
Short term borrowings
|
194 405
|
126 787
|
|
Provisions
|
68 752
|
84 464
|
|
Taxation payable
|
29 726
|
21 233
|
|
Current Liabilities
|
923 847
|
1 190 406
|
|
Total Equity and Liabilities
|
3 387 500
|
4 757 345
|
|
ASSETS
|
|
|
|
Property plant and Equipment
|
599 746
|
857 471
|
|
Deferred Tax
|
20 030
|
23 967
|
|
Investments
|
138 037
|
139 012
|
|
Investments in Associates
|
12 200
|
12 200
|
Intangible assets 304 240 424 149
Non-Current Assets 1 074 253 1 456 799
4.1 Calculate and comment on any three liquidity of the Goget company.
4.2 Calculate and comment any three profitability ratios of the company.
4.3 Comment on the solvency of Goget.
4.4 Calculate and comment on any three turnover ratios.
4.5 Concerning the Auditor's report answer the following:
4.5.1 Who is responsible for the preparation of the Annual financial statements?
4.5.2 To whom should an audit report addressed to and why?
4.5.3 What is the difference between a qualified and unqualified audit opinion.
4.3 Comment on the solvency of Goget.
4.4 Calculate and comment on any three turnover ratios.
4.5 Concerning the Auditor's report answer the following:
|
4.5.1
|
Who is responsible for the preparation of
|
the
|
Annual
|
|
|
financial statements?
|
|
(1)
|
|
4.5.2 To whom should an audit report addressed to and why? (2)
|
4.5.3 What is the difference between a qualified and unqualified audit opinion.
Question 5
Loudfire Safaris have requested you to prepare a cash budget for the period ending 31 March 2013. The following projections have been made for the next 4 months
|
|
December
(Rand)
|
January
(Rand)
|
February
(Rand)
|
March (Rand)
|
|
Credit
Purchases
|
10 000
|
15 000
|
18 000
|
25 000
|
|
Credit Sales
|
25 000
|
35 000
|
40 000
|
55 000
|
Additional information:
60% of the sales are collected in the month of the sale and the balance the following month.
30% of the purchases are paid for in the month of purchase, 50% in the following month and the balance in the month after.
Monthly salaries: R12 500
Advertising per month R3 600
The debit balance at the bank at end of December was R 5 000.
Required:
Prepare a cash budget statement to ascertain the cash position at the end of every month for Loudfire Safaris.