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CAS3701 - Case 3 - Assessment 16
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solution for CAS3701 - Case study 3 - Assessment 16. critique the Capital budgeting calculations. DEADLINE EXTENDED TO 12 SEPTEMBER 2023
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CAS3701 – CASE 3 –ASSESSMENT 16
Solution
SEPTEMBER 8, 2023
UNISA
, This is an individual assessment!
Case 3:
The purpose of the case study below is to assess your ability to solve problems and to think critically
while considering the integration of topics.
Due date: 8 September 2023
Question 1 - Municipality supplied water option
1. Water supply costs: average cost per kilolitre is calculated correctly. The total cost is
incorrect, as it only includes one month. The calculation must also be multiplied by 12
months. The correct total cost is R71 740(R5.23 * 11 500 kilolitres * 12 months).
2. Water charges after the 6% increase: If the inflation rate deviates from the assumed 6%,
the future cash flows could be overestimated or underestimated. This could lead to
inaccuracies in both short-term and long-term financial projections.
The calculated total cost must be added in the year 2023. 6% increase is not included in the
year 2024, it started on year 2025 which is incorrect, and this will affect the future cash flows.
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