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MAC3761/Assignment01/0/2021
MAC3761
MANAGEMENT ACCOUNTING III
COMPULSORY ASSIGNMENT 01/2021
Academic Type Assignment Due date Unique
Year number number
2021 MCQ 01 3 May 2021 662442
Before attempting this assignment:
Study the relevant topics in the study material as indicated on page 17 of Tutorial Letter
101/2021.
Take note that, as prerequisites for MAC3761, both MAC2601 and MAC2602 form part of
an important foundation on which MAC3761 builds. The MAC2601 and MAC2602 study
materials are therefore regarded as prior knowledge and all the work covered in MAC2601
and MAC2602 is examinable in MAC3761 (whether or not it was revisited in MAC3761). It
is for this reason that this assignment includes revision of some of the work covered in
MAC2601 and MAC2602.
You are reminded that this assignment is not a group assignment and must be your own
work.
THE MARK YOU EARN FOR THIS COMPULSORY ASSIGNMENT 01 WILL WEIGH 10%
IN THE CALCULATION OF YOUR YEAR MARK.
The marks earned for your formative assessments carry the following weights in the
calculation of your year mark:
Formative assessment Weights
Assignment 01 10%
Year test 70%
Assignment 02 20%
Total 100%
Complete this assignment on the online mark-reading sheet. Mark-reading sheets can
only be submitted electronically via myUnisa. Refer to the brochure Study@Unisa for
information on submitting multiple choice assignments online (via myUnisa). Also refer
to section 8.3 of Tutorial Letter 101/2021.
You can also refer to this link on how to submit online assignments on myUnisa:
https://www.unisa.ac.za/sites/myunisa/default/Assignments-&
Examination/Assignments/Assignment-submission-with-myUnisa
Take note to submit this assignment using the correct unique number (662442) on
myUnisa.
This assignment consists of 40 multiple-choice questions. Each question counts 1 mark,
and the entire assignment counts 40 marks in total. All questions must be answered.
Consider each question independently unless specific reference is made to the contrary.
Each question has only one correct answer from the given options.
[TURN OVER]
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MAC3761/Assignment01/0/2021
Use the following information to answer questions 1 to 15 (all inclusive):
Industrial Printers Limited’s (“InduPrint”) overall organisational activities and processes aimed at value
creation for its shareholders and stakeholders are the manufacturing of paper and the large-scale
printing of paper solutions. In the main, the manufacturing of the paper takes place at the company’s
plantation while the printing activities relates to the printing of: personnel diaries; promotional,
advertising and awareness banners; workshop study materials; training manuals; and policy documents
for various corporate entities and government institutions. The company provides, transforms and
employs the following six “system of inputs” through its organisational activities: (i) short and long-term
financing resources (cash, debt and equity); (ii) paper manufacturing infrastructure, plant, and
equipment; (iii) paper manufacturing patents, copyrights and self-developed technologies; (iv)
management staff and blue-collar workers; (v) a network of established relationships with various
institutions, communities, and stakeholders; and (vi) plantation (land) and irrigation water.
As part of selecting the most appropriate strategy for the company, InduPrint’s management assessed
both the internal and external environments within which the company operates. This assessment
included the following amongst others, the desired company culture; possible regulatory impediments;
identification of suppliers and materials; decision on product offering; the rate of industry’s technological
advancement; and envisaged competitive position. In this regard, it was noted with concern that while
adequate mitigating measures are in place for internal environment risks, the external environment
poses the most significant risks to the company’s growth prospect. In responding to the strategic analysis
of the risks relating to both internal and external environment of the company, InduPrint adopted a
strategy that is grounded on (i) alliances; (ii) new markets and organic growth; and (iii) acquisitions.
To minimise the impact of its carbon emission, InduPrint is situated in a remote industrial area. The
company powers its operation with the electricity supplied by the country’s power utility. However, due
to ongoing loadshedding, the company’s growth prospect is at risk. As such, InduPrint is considering
investing in 20 wind turbines. According to InduPrint, this investment is poised to reduce the prevalence
of business disruptions resulting from power-outages and subsequently improve the company’s
competitive edge through achieving one of its strategic objectives of “commitment to environmentally
friendly operations through renewable energy”. The proposed 20 turbines will be acquired from and
installed by an overseas-based company at a cost of €73 500 per turbine. The exchange rate applicable
to this purchase and installation is R1: €0,0525. The investment in the turbines will first be funded by all
the cash resources available as at 31 March 2021. The resulting shortfall (if any) will be funded by a
combination of the existing long-term funding instruments in accordance with the book value capital
structure as at 31 March 2021. Where necessary, in funding this investment, ordinary shares will be
issued at their market price as at 31 March 2021. InduPrint has access to R20 million bank overdraft
facility for short-term funding requirements only. This facility is only used if cash resources are depleted.
Summary of complete statement of financial position (balance sheet) as at 31 March 2021:
Year-ending 2021 2020 2019
Details Notes R’000 R’000 R’000
Bank and cash/ (bank overdraft) 4 500 4 050 (3 800)
All other assets ? ? ?
Ordinary share capital 1 73 500 73 500 73 500
Retained earnings/(loss) 1 5 700 3 200 (850)
8,5% Preference share capital 2 7 800 7 800 7 800
Long-term loan 3 20 000 20 000 20 000
7,5% Debentures at coupon value 4 ? ? ?
Trade and other payables 5 500 5 800 4 950
Dividends declared and payable 5 12 663 11 913 3 663
[TURN OVER]
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MAC3761/Assignment01/0/2021
Notes and information relating to the above summary of statement of financial position:
1. The company does not plan to adjust its authorised number of ordinary shares of 16 455 155. Shares
were issued at an average historical cost of R4,90 per share. On 31 March 2021, InduPrint’s dividend
yield was 10% while the expected future growth rate of the ordinary dividends was determined at
5% per annum.
2. 2,6 million redeemable preference shares are in issue since incorporation. All these preference
shares will be redeemed on 31 March 2024 at their nominal value. On 31 March 2021, the annual
dividend rate of similar preference shares was 8,2%.
3. Four years ago, CapuTrech Bank advanced a long-term loan to InduPrint at a fixed interest rate of
8% per annum. On 31 March 2021, similar long-term loans were issued at a fixed interest rate of
7,25% per annum.
4. InduPrint has 500 000 debentures at a coupon value of R50 each in issue. During each financial
year, interest on these debentures is paid in arrears and in equal quarterly instalments. All these
debentures will be redeemed at a premium of 2% on their coupon value in five years’ time from now
(InduPrint’s latest balance sheet date). On 31 March 2021, these debentures were worth
R26,5 million.
5. Both ordinary and preference dividends are declared on 31 March each year and are subsequently
fully paid on 15 June of that year. To date, no dividends from previous periods are owing.
6. Corporate taxation rate is 28% and operating days were 365 days in 2021, 366 days in 2020 and
365 days in 2019. Where applicable, interest rates are pre-tax unless stated otherwise.
7. InduPrint’s management accountant (Mr Rotertram) started but unfortunately was unable to
complete Table YX below regarding the company’s calculation of the weighted average cost of
capital (WACC). Mr Rotertram has since approached you for assistance to complete the table.
Table YX: InduPrint’s WACC calculation as at 31 March 2021:
Capital structure Values Weight Cost of WACC
Rmil capital %
Ordinary share capital ? ? (d) ?
Preference share capital (a) ? ? ?
Long-term loan (b) (c) ? ?
Debentures 26,5 ? (e) ?
Total ? ? ?
QUESTION 1
“Industrial Printers Limited’s (“InduPrint”) overall organisational activities and processes aimed at value
creation for its shareholders and stakeholders are the manufacturing of paper and the large-scale
printing of paper solutions”
The above statement provides a description that explains InduPrint’s ___________
(1) integrated thinking.
(2) organisational structure.
(3) business model.
(4) risk management.
(5) none of the above options.
[TURN OVER]
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MAC3761/Assignment01/0/2021
QUESTION 2
Regarding InduPrint’s value creation process and by reference to the company’s organisational
activities, in the below matrix, the most accurate combination of the InduPrint’s “system of inputs” is
option ___________
“System of Options
inputs” –
reference (1) (2) (3) (4) (5)
number
(i) Financial Financial Financial Financial Financial
(iii) Manufactured Manufactured Intellectual Intellectual Property
(iv) Human Intellectual Employee Human Society
(vi) Social Natural Social Natural Manufactured
QUESTION 3
As part of selecting the most appropriate company strategy, the assessment of InduPrint’s external
environment would have included the following aspects amongst others ___________
(1) competitive position; company culture; and regulatory impediments.
(2) regulatory impediments; competitive position; and industry’s technological advancement.
(3) product offering; identification of suppliers and materials; and company culture.
(4) industry’s technological advancement; regulatory impediments; and company culture.
(5) natural environment; demographic composition; and governance regime.
QUESTION 4
After considering the external and internal environment, and in responding to the identified risks,
InduPrint identified and adopted ___________ as the most appropriate strategy option for the company.
(1) an information technology strategy
(2) a growth strategy
(3) a competitive strategy
(4) a product-market strategy
(5) none of the above options.
QUESTION 5
InduPrint’s strategic objective of “commitment to environmentally friendly operations through renewable
energy” can be regarded as a ___________ strategy type.
(1) corporate
(2) financial
(3) functional
(4) business
(5) none of the above options.
QUESTION 6
The total portion of the purchase and installation cost of the proposed investment in the 20 wind turbines
that is to be financed by InduPrint’s existing long-term funding instruments is ___________
(1) R23 500 000.
(2) R18 000 000.
(3) R28 000 000.
(4) R14 700 000.
(5) none of the above options.
[TURN OVER]
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MAC3761/Assignment01/0/2021
MAC3761
MANAGEMENT ACCOUNTING III
COMPULSORY ASSIGNMENT 01/2021
Academic Type Assignment Due date Unique
Year number number
2021 MCQ 01 3 May 2021 662442
Before attempting this assignment:
Study the relevant topics in the study material as indicated on page 17 of Tutorial Letter
101/2021.
Take note that, as prerequisites for MAC3761, both MAC2601 and MAC2602 form part of
an important foundation on which MAC3761 builds. The MAC2601 and MAC2602 study
materials are therefore regarded as prior knowledge and all the work covered in MAC2601
and MAC2602 is examinable in MAC3761 (whether or not it was revisited in MAC3761). It
is for this reason that this assignment includes revision of some of the work covered in
MAC2601 and MAC2602.
You are reminded that this assignment is not a group assignment and must be your own
work.
THE MARK YOU EARN FOR THIS COMPULSORY ASSIGNMENT 01 WILL WEIGH 10%
IN THE CALCULATION OF YOUR YEAR MARK.
The marks earned for your formative assessments carry the following weights in the
calculation of your year mark:
Formative assessment Weights
Assignment 01 10%
Year test 70%
Assignment 02 20%
Total 100%
Complete this assignment on the online mark-reading sheet. Mark-reading sheets can
only be submitted electronically via myUnisa. Refer to the brochure Study@Unisa for
information on submitting multiple choice assignments online (via myUnisa). Also refer
to section 8.3 of Tutorial Letter 101/2021.
You can also refer to this link on how to submit online assignments on myUnisa:
https://www.unisa.ac.za/sites/myunisa/default/Assignments-&
Examination/Assignments/Assignment-submission-with-myUnisa
Take note to submit this assignment using the correct unique number (662442) on
myUnisa.
This assignment consists of 40 multiple-choice questions. Each question counts 1 mark,
and the entire assignment counts 40 marks in total. All questions must be answered.
Consider each question independently unless specific reference is made to the contrary.
Each question has only one correct answer from the given options.
[TURN OVER]
Downloaded by Dimpho KEKANA ()
, lOMoARcPSD|13347762
MAC3761/Assignment01/0/2021
Use the following information to answer questions 1 to 15 (all inclusive):
Industrial Printers Limited’s (“InduPrint”) overall organisational activities and processes aimed at value
creation for its shareholders and stakeholders are the manufacturing of paper and the large-scale
printing of paper solutions. In the main, the manufacturing of the paper takes place at the company’s
plantation while the printing activities relates to the printing of: personnel diaries; promotional,
advertising and awareness banners; workshop study materials; training manuals; and policy documents
for various corporate entities and government institutions. The company provides, transforms and
employs the following six “system of inputs” through its organisational activities: (i) short and long-term
financing resources (cash, debt and equity); (ii) paper manufacturing infrastructure, plant, and
equipment; (iii) paper manufacturing patents, copyrights and self-developed technologies; (iv)
management staff and blue-collar workers; (v) a network of established relationships with various
institutions, communities, and stakeholders; and (vi) plantation (land) and irrigation water.
As part of selecting the most appropriate strategy for the company, InduPrint’s management assessed
both the internal and external environments within which the company operates. This assessment
included the following amongst others, the desired company culture; possible regulatory impediments;
identification of suppliers and materials; decision on product offering; the rate of industry’s technological
advancement; and envisaged competitive position. In this regard, it was noted with concern that while
adequate mitigating measures are in place for internal environment risks, the external environment
poses the most significant risks to the company’s growth prospect. In responding to the strategic analysis
of the risks relating to both internal and external environment of the company, InduPrint adopted a
strategy that is grounded on (i) alliances; (ii) new markets and organic growth; and (iii) acquisitions.
To minimise the impact of its carbon emission, InduPrint is situated in a remote industrial area. The
company powers its operation with the electricity supplied by the country’s power utility. However, due
to ongoing loadshedding, the company’s growth prospect is at risk. As such, InduPrint is considering
investing in 20 wind turbines. According to InduPrint, this investment is poised to reduce the prevalence
of business disruptions resulting from power-outages and subsequently improve the company’s
competitive edge through achieving one of its strategic objectives of “commitment to environmentally
friendly operations through renewable energy”. The proposed 20 turbines will be acquired from and
installed by an overseas-based company at a cost of €73 500 per turbine. The exchange rate applicable
to this purchase and installation is R1: €0,0525. The investment in the turbines will first be funded by all
the cash resources available as at 31 March 2021. The resulting shortfall (if any) will be funded by a
combination of the existing long-term funding instruments in accordance with the book value capital
structure as at 31 March 2021. Where necessary, in funding this investment, ordinary shares will be
issued at their market price as at 31 March 2021. InduPrint has access to R20 million bank overdraft
facility for short-term funding requirements only. This facility is only used if cash resources are depleted.
Summary of complete statement of financial position (balance sheet) as at 31 March 2021:
Year-ending 2021 2020 2019
Details Notes R’000 R’000 R’000
Bank and cash/ (bank overdraft) 4 500 4 050 (3 800)
All other assets ? ? ?
Ordinary share capital 1 73 500 73 500 73 500
Retained earnings/(loss) 1 5 700 3 200 (850)
8,5% Preference share capital 2 7 800 7 800 7 800
Long-term loan 3 20 000 20 000 20 000
7,5% Debentures at coupon value 4 ? ? ?
Trade and other payables 5 500 5 800 4 950
Dividends declared and payable 5 12 663 11 913 3 663
[TURN OVER]
Downloaded by Dimpho KEKANA ()
, lOMoARcPSD|13347762
MAC3761/Assignment01/0/2021
Notes and information relating to the above summary of statement of financial position:
1. The company does not plan to adjust its authorised number of ordinary shares of 16 455 155. Shares
were issued at an average historical cost of R4,90 per share. On 31 March 2021, InduPrint’s dividend
yield was 10% while the expected future growth rate of the ordinary dividends was determined at
5% per annum.
2. 2,6 million redeemable preference shares are in issue since incorporation. All these preference
shares will be redeemed on 31 March 2024 at their nominal value. On 31 March 2021, the annual
dividend rate of similar preference shares was 8,2%.
3. Four years ago, CapuTrech Bank advanced a long-term loan to InduPrint at a fixed interest rate of
8% per annum. On 31 March 2021, similar long-term loans were issued at a fixed interest rate of
7,25% per annum.
4. InduPrint has 500 000 debentures at a coupon value of R50 each in issue. During each financial
year, interest on these debentures is paid in arrears and in equal quarterly instalments. All these
debentures will be redeemed at a premium of 2% on their coupon value in five years’ time from now
(InduPrint’s latest balance sheet date). On 31 March 2021, these debentures were worth
R26,5 million.
5. Both ordinary and preference dividends are declared on 31 March each year and are subsequently
fully paid on 15 June of that year. To date, no dividends from previous periods are owing.
6. Corporate taxation rate is 28% and operating days were 365 days in 2021, 366 days in 2020 and
365 days in 2019. Where applicable, interest rates are pre-tax unless stated otherwise.
7. InduPrint’s management accountant (Mr Rotertram) started but unfortunately was unable to
complete Table YX below regarding the company’s calculation of the weighted average cost of
capital (WACC). Mr Rotertram has since approached you for assistance to complete the table.
Table YX: InduPrint’s WACC calculation as at 31 March 2021:
Capital structure Values Weight Cost of WACC
Rmil capital %
Ordinary share capital ? ? (d) ?
Preference share capital (a) ? ? ?
Long-term loan (b) (c) ? ?
Debentures 26,5 ? (e) ?
Total ? ? ?
QUESTION 1
“Industrial Printers Limited’s (“InduPrint”) overall organisational activities and processes aimed at value
creation for its shareholders and stakeholders are the manufacturing of paper and the large-scale
printing of paper solutions”
The above statement provides a description that explains InduPrint’s ___________
(1) integrated thinking.
(2) organisational structure.
(3) business model.
(4) risk management.
(5) none of the above options.
[TURN OVER]
Downloaded by Dimpho KEKANA ()
, lOMoARcPSD|13347762
MAC3761/Assignment01/0/2021
QUESTION 2
Regarding InduPrint’s value creation process and by reference to the company’s organisational
activities, in the below matrix, the most accurate combination of the InduPrint’s “system of inputs” is
option ___________
“System of Options
inputs” –
reference (1) (2) (3) (4) (5)
number
(i) Financial Financial Financial Financial Financial
(iii) Manufactured Manufactured Intellectual Intellectual Property
(iv) Human Intellectual Employee Human Society
(vi) Social Natural Social Natural Manufactured
QUESTION 3
As part of selecting the most appropriate company strategy, the assessment of InduPrint’s external
environment would have included the following aspects amongst others ___________
(1) competitive position; company culture; and regulatory impediments.
(2) regulatory impediments; competitive position; and industry’s technological advancement.
(3) product offering; identification of suppliers and materials; and company culture.
(4) industry’s technological advancement; regulatory impediments; and company culture.
(5) natural environment; demographic composition; and governance regime.
QUESTION 4
After considering the external and internal environment, and in responding to the identified risks,
InduPrint identified and adopted ___________ as the most appropriate strategy option for the company.
(1) an information technology strategy
(2) a growth strategy
(3) a competitive strategy
(4) a product-market strategy
(5) none of the above options.
QUESTION 5
InduPrint’s strategic objective of “commitment to environmentally friendly operations through renewable
energy” can be regarded as a ___________ strategy type.
(1) corporate
(2) financial
(3) functional
(4) business
(5) none of the above options.
QUESTION 6
The total portion of the purchase and installation cost of the proposed investment in the 20 wind turbines
that is to be financed by InduPrint’s existing long-term funding instruments is ___________
(1) R23 500 000.
(2) R18 000 000.
(3) R28 000 000.
(4) R14 700 000.
(5) none of the above options.
[TURN OVER]
Downloaded by Dimpho KEKANA ()
