STARPLUS LIMITED: PLANNING FOR 2023 Starplus, Limited is well known for its focus on customer satisfaction and this is highlighted in the company profile. Their "About Us" page on their website tells a story of service and growth, all centred around their customers. This, combined with the excellent quality products offered, has contributed to its success in the marketplace. At the end of 2022 the fixed assets (at carrying value) totalled R5 300 000, inventories amounted to R5 200 000, R2 100 000 was owed by trade debtors, cash in the bank amounted to R400 000, the ordinary share capital balance was R4 500 000, the accumulated undistributed profits amounted to R1 700 000, an amount of R5 900 000 was owed to Zap Bank in respect of a long-term loan and R900 000 was ower
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Using the attached, Refer to the investment opportunities for 2023 and calculate the following. (Ignore
taxes.)
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- Micropolis Technology began a new development project in 2020. The project reached technological feasibility on September 1, 2021, and was available for release to customers at the beginning of 2022. Development costs incurred prior to September 1, 2021, were $4,560,000, and costs incurred from June 30 to the product release date were $1,920,000. The 2022 revenues from the sale of the new software were $3,950,000, and the company anticipates additional revenues of $11,850,000. The economic life of the software is estimated at three years. Amortization of the software development costs for the year 2022 would be:A company began a new software development project in 2023. The project reached technological feasibility on June 30, 2024, and was available for release to customers at the beginning of 2025. Development costs incurred prior to June 30, 2024, were $3,260,000 and costs incurred from June 30, 2024, to the product release date were $1,460,000. The economic life of the software is estimated at four years. For what amount will software be capitalized in 2024?SA Construction Limited currently operates in Trinidad. The company is considering setting up another location in either Barbados or Jamaica. The Projected Income Statement for 2023 is as follows:USDIncomeSales 90,000Interest Income 2,500Dividend Income 6,000Other Income (exempt) 2,000ExpensesDepreciation 20,000Interest Expenses (1) 7,000 Repairs & Maintenance 1,500Legal & professional fees (2) 8,000Salaries 30,000 Bad debts (3) 3,000Other Expenses (4) 20,000 Taxation 2,250Notes1. All Interest was paid. There was no accrued interest at year end.2. Professional fees consist of:• Audit and accountancy fees $3,600• Legal fees re collection of bad debts $2,000• Cost of setting up business in the selected location $900• Architect’s fee for designing a warehouse that has not yet been constructed $1,5003. The Bad Debts expense represents a debt which was outstanding for 270 days.4. Other expenses include $1,000 for expenses paid on behalf of another company owned by SA Construction…
- A company is thinking about marketing a new product. Up-front costs to market and develop the product are $13.60 Million. The product is expected to generate profits of $2.48 million per year for 26 years. The company will have to provide product support expected to cost $218348 per year in perpetuity. Furthermore, the company expects to invest $40739 per year for 10 years for renovations on the product. This investing would start at the end of year 7. Assume all profits and expenses occur at the end of the year. Calculate the NPV of this project if the interest rate is 6.91%SA Construction Limited currently operates in Trinidad. The company is considering setting up another location in either Barbados or Jamaica. The Projected Income Statement for 2023 is as follows:USDIncomeSales 90,000Interest Income 2,500Dividend Income 6,000Other Income (exempt) 2,000 ExpensesDepreciation 20,000Interest Expenses (1) 7,000 Repairs & Maintenance 1,500Legal & professional fees (2) 8,000Salaries 30,000 Bad debts (3) 3,000Other Expenses (4) 20,000 Taxation 2,250Notes1. All Interest was paid. There was no accrued interest at year end.2. Professional fees consist of:• Audit and accountancy fees $3,600• Legal fees re collection of bad debts $2,000• Cost of setting up business in the selected location $900• Architect’s fee for designing a warehouse that has not yet been constructed $1,5003. The Bad Debts expense represents a debt which was outstanding for 270 days.4. Other expenses include $1,000 for expenses paid on behalf of another company owned by SA Construction…SA Construction Limited currently operates in Trinidad. The company is considering setting up another location in either Barbados or Jamaica. The Projected Income Statement for 2023 is as follows:USDIncomeSales 90,000Interest Income 2,500Dividend Income 6,000Other Income (exempt) 2,000 ExpensesDepreciation 20,000Interest Expenses (1) 7,000 Repairs & Maintenance 1,500Legal & professional fees (2) 8,000Salaries 30,000 Bad debts (3) 3,000Other Expenses (4) 20,000 Taxation 2,250Notes1. All Interest was paid. There was no accrued interest at year end.2. Professional fees consist of:• Audit and accountancy fees $3,600• Legal fees re collection of bad debts $2,000• Cost of setting up business in the selected location $900• Architect’s fee for designing a warehouse that has not yet been constructed $1,5003. The Bad Debts expense represents a debt which was outstanding for 270 days.4. Other expenses include $1,000 for expenses paid on behalf of another company owned by SA Construction…
- Assoria Plc has $20 million of capitalised development expenditure at cost brought forward at 1 October 2022 in respect of products currently in production. A new project began on 1 October 2022. The research stage of the new project lasted until 31 December 2022 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 2023 the directors of Assoria Co became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 2023. Capitalised development expenditure is amortised at 20% per annum using the straight-line method. What amount will be charged to profit or loss for the year ended 30 September 2023 in respect of research and development costs?Beta-Juliet, a major manufacturer of carriages in Tibikeland, Verona has signed a partnership agreement with Disney which means from 2022 Beta-Juliet will be supplying first-class carriages to Disneyland. With the announcement of this news, Sophia, the CFO is expecting a steady revenue over the following years, therefore recommends an increase in their constant dividend rate to 12% as of 2022. After the first year, the end of 2022, the company's net income has increased to 100 million DD (DisneyDollars). The market price is 1000 DD and there are 1 million shares traded on the stock market. What is the dividend yield? Answer up to 3 decimal places.This problem has subparts that still need to be answered Assume Avaya contracted to provide a customer with Internet infrastructure for $2,350,000. The project began in 2024 and was completed in 2025. Data relating to the contract are summarized below: 2024 2025 Costs incurred during the year $ 328,000 $ 1,830,000 Estimated costs to complete as of 12/31 1,312,000 0 Billings during the year 436,000 1,690,000 Cash collections during the year 341,000 1,785,000 Required: Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming Avaya recognizes revenue over time according to percentage of completion. Compute the amount of revenue and gross profit or loss to be recognized in 2024 and 2025, assuming this project does not qualify for revenue recognition over time. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2024, assuming Avaya recognizes revenue over time…
- Axcel Software began a new development project in 2015. The project reached technological feasibility on June 30, 2016, and was available for release to customers at the beginning of 2017. Development costs incurred prior to June 30, 2016, were $3,200,000 and costs incurred from June 30 to the product release date were $1,400,000. The 2017 revenues from the sale of the new software were $4,000,000, and the company anticipates additional revenues of $6,000,000. The economic life of the software is estimated at four years. Capitalized software costs are: A. $0. B. $3,200,000. C. $1,400,000. D. $4,600,000Pseudo Enterprise has ambitious expansion plans for 2022. At a recent Annual General Meeting, the shareholders approved the proposal for further expansion and the board of directors has allocated £330,000 for new projects. As the Senior Manager of Pseudo Enterprise, you have been authorised to conduct the project appraisal for five new projects and submit a recommendation to management on how best to spend £330,000 for new projects. The projects you are considering have the following information: Year 0 (£,000) 1 (£,000) 2 (£,000) 3 (£,000) 4 (£,000) Project 1 -105 0 180 0 0 Project 2 -150 90 90 90 0 Project 3 -60 30 30 30 30 Project 4 -90 45 45 45 45 Project 5 -180 210 0 0 0 The cash flows are confined to the lifetime of each project. Apart from initial investments that occur at the beginning of the project, all cash flows occur at year end. The following information on the projects is…Pseudo Enterprise has ambitious expansion plans for 2022. At a recent Annual General Meeting, the shareholders approved the proposal for further expansion and the board of directors has allocated £330,000 for new projects. As the Senior Manager of Pseudo Enterprise, you have been authorised to conduct the project appraisal for five new projects and submit a recommendation to management on how best to spend £330,000 for new projects. The projects you are considering have the following information: Year 0 (£,000) 1 (£,000) 2 (£,000) 3 (£,000) 4 (£,000) Project 1 -105 0 180 0 0 Project 2 -150 90 90 90 0 Project 3 -60 30 30 30 30 Project 4 -90 45 45 45 45 Project 5 -180 210 0 0 0 The cash flows are confined to the lifetime of each project. Apart from initial investments that occur at the beginning of the project, all cash flows occur at year end. The following information on the projects is…