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$1.$ NIPA Plc intends to undertake a project in a machine with the following details:

Machine A

Cost of Investments K $100,000$

Expected Cash Flows : Year $1$ K $6,000,$ Year $2$ K$6,000,$ Year $3$ K $5,500,$ Year $4$ K $5,000$ Year $5$

K$4,400$

Cost of Capital through out the $5$year period is $10\%.$

Required :

$(1)$ Advise if the project can be undertaken $(5$ marks $)$

$2.$ Maamba Collieries Limited plans to undertake a project with the following details :

Cost of the Thermal Power Plant $-$ $ $500,000$

Expected Cash Flows : Year $1$ $ $160,000$ Year $2$ $ $155,000$ Year $3$ $ $70,000$ Year $4$ $ $80,000$ Year $5$

$$80,000$

Cost of Capital through the $5$year period is $12\%.$

Required :

$(1)$ Calculate the Net Present Value and comment on the results $(5$ marks $)$

$3.$ Dunavant Zambia Limited has $2$ projects A and B$.$ The following are the details.

Project A Project B

Cost of Investment K$100,000$ K$80,000$

Cash Inflows :

Year $1$ K $30,000$ K$30,000$

Year $2$ K $35,000$ K$35,000$

Year $3$ K$40,000$ K$40,000$

Year $4$ K$50,000$ K$50,000$

Year $5$ K$30,000$ K$60,000$

Calculate the Pay Back Period for Project A and Project B $(5$ marks $)$

Due Date : $29$th September $2024$ Midnight $.$

Test $3$

NIPA Plc

Statement of Income and Other Comprehensive Income for the year ending $31$ December $2023$

$20232022$

K K

Revenue $140,000100,000$

Cost of Sales $(50,000)(20,000)$

Gross Profit $90,00080,000$

Profit Before Tax $50,00040,000$

Tax @ $30\%(15,000)(12,000)$

Profit After Tax $35,00038,000$

NIPA Plc

Statement of Financial Position for the year ending $31$st December $2023$

$20232022$

K K

Non Current Assets :

Property Plant and Equipment $200,000220,000$

Furniture Fittings & Equipment $100,000150,000$

Total Non Current Assets $300,000370,000$

Current Assets :

Inventory $20,00015,000$

Trade Receivables $50,00075,000$

Cash and Bank $30,00020,000$

Total Current Assets $100,000100,000$

Total Assets $400,000470,000$

Shareholders Funds :

Ordinary Share Capital $25,00025,000$

Share Premium $100,000100,000$

Accumulated Profits $25,00015,000$

Total $150,000140,000$

Non Current Liabilities

Term Loan $150,000150,000$

Current Laibilities

Trade Creditors $60,00040,000$

Tax Payable $30,00060,000$

Amounst due to related parties $10,00080,000$

Total Shareholders Funds and Liabilities $400,000470,000$

Required :

a$)$ Analyse the financial performance of NIPA Plc focusing on the following.

$(1)$ Profitability

$(2)$ Efficiency

$(3)$ Liquidity

$(4)$ Gearing

b$)$ Comment on the going concern assumption of NIPA plc$.(10$ marks $)$

Due Date : $29$th September $2024$ Midnight $.$

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