Tutorial letter 202/2/2014
Application of financial management techniques SEMESTER 2
Department of Management Accounting
This tutorial letter contains important information about your module.
Enclosed please find the solution in respect of assignment 02/2014. It is in your own interest to work through the suggested solution in conjunction with the assignment and your own answer.
Mr N Masela
012 429 4415
1 – 37
Mrs S Büchner
012 429 2266
1 – 57
Mrs S Klopper
012 429 8526
1 – 40
SOLUTION FOR ASSIGNMENT 02/2014 FOR THE SECOND SEMESTER
Determining value of company…show more content… Furthermore, we need to always compare apples with apples and therefore adjust cash flows with inflation due to the rate including inflation. The opposite is also true.
Sam should not invest in the new business venture since the Net Present Value is negative. (b)
Sam should consider the following business risks:
Industry type risk
Due to the economic recession less people are going on holiday to these luxury type lodges
Fuel price hikes
What impact will an increase in the fuel price have on the sales price of my game drives and