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MNB1601-25-EX10
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During the 2010 FIFA World Cup in South Africa, Avis quickly expanded its car rental fleet to meet the sudden surge in demand from international visitors. This is an example of:
Study the information from IBM’s financial statements below:
|
Dec 31, 2020
|
Dec 31, 2019
|
Dec 31, 2018
|
Current assets
|
R 48 116 000
|
R 48 935 000
|
R 49 004 000
|
Current liabilities
|
R 40 562 000
|
R 36 002 000
|
R 42 435 000
|
Inventory
|
R 2 450 000
|
R 2 494 000
|
R 2 701 000
|
Owners’ equity
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R56 455 000
|
R55 932 000
|
R53 657 000
|
Total liabilities
|
R 90 405 000
|
R 86 385 000
|
R 96 058 000
|
Total assets
|
R 113 452 000
|
R 109 022 000
|
R 109 524 000
|
Net income
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R 14 833 000
|
R 13 425 000
|
R 12 334 000
|
Net profit
|
R 46 014 000
|
R 43 785 000
|
R 45 661 000
|
Sales
|
R 99 870 000
|
R 95 758 000
|
R 103 630 000
|
What is the return on owners’ equity (ROE) for the year 2019?
Khanyisile owns a fabric store and offers a curtain-making service to her customers. The industrial machine used to sew the curtains has broken down and Khanyisile needs to decide if it is worth it to replace the machine right now.
A new machine is worth R50 000, but she does not really have the capital now to replace the machine. Her brother owns such a machine and has indicated that he will give it to her now with payment only due in three years. He is willing to let her take the machine for R75 000 at an interest rate of 15% per year.
She has approached you to assist her and you advise her that she will need to look at the present value of the machine before deciding. Given the high decrease of the discounting factors along with the high interest rates offered on the machine and the long time period she will require to pay off the machines, the following is correct: