Finance Answers

Critically discuss, with the aid

of diagrams the conditional no -matching grants with unconditional nonmatching grant (25 marks)

Discuss positive externality in 

consumption. With suitable diagrams,

As a result of imbalance in revenue generation by provincial governments and local municipalities in 

South Africa, intergovernmental grants have been a important source of finance for Local 

Governments. The allocations of these funds for use in the local authorities have been questionable, 

some doubting if the funds are use for what they were earmarked for. Critically discuss, with the aid

of diagrams the conditional no -matching grants with unconditional nonmatching grant

Animax sells 150 000 units of dog food to retail stores. The cost to the company is $25 per unit. The cost of processing each order is $260 and the carrying cost is $4.50 per unit. Required:

Using the EOQ model, calculate the quantity the company should order at a time.

The National Company has just been formed. They have a patented process which will make them the sole suppliers of Product A.

 During the first year the capacity of their plant will be 9,000 units and this is the amount they will be able to sell.

Their costs are:

Direct Labor = £15 per unit

Raw material = £5 per unit

Other variable costs = £10 per unit

Fixed costs = £240,000

Required:

(a). If the company wishes to make a profit of £210,000 during the first year, what should be the selling price? What is the contribution margin at this price?

(b). If at the end of first year, they wish to increase their volume and an increase or £100,000 in the annual fixed costs will increase their capacity to 50,000 units, how many units will they have to sell to realise a profit of £760,000, if their selling price is £70 per unit and no other costs change, except that invest £500,000 in advertising with a view to achieve this end?

Question 1 (25 Marks)

1.1 Differentiate between fiscal policy and monetary policy.

(5)

1.2 The spread of COVIC-19 across all countries of the world resulted in resorting to various forms of 

lockdown measures. The locks down measures crippled many economies including the South African 

Economy. To resuscitate these economies, there is renewed interest in fiscal policy as a tool 

macroeconomic policy. Critically discuss the shortcomings of anti-cyclical policy

Question 2 (25 Marks

Define social security, critically discuss the effects of social grants on incomes and welfare

As a result of imbalance in revenue generation by provincial governments and local municipalities in South Africa, intergovernmental grants have been a important source of finance for Local Governments. The allocations of these funds for use in the local authorities have been questionable, some doubting if the funds are use for what they were earmarked for. Critically discuss, with the aid of diagrams the conditional no -matching grants with unconditional nonmatching grant?

The governments of the world are grappling with Covid 19 pandemic, several measures are being implemented, namely, sanitizing, social distancing, hand-washing, working from home or online and various forms of Lockdowns. The hope of all nations is to vaccinate at least 70% of the population to reach head-immunity. This is based on Scientific advice, that once that population percentage is immunized, the whole population would be protected, Economist call this positive externality in consumption. With suitable diagrams, illustrate and discuss the phenomenon highlighted above.