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CONTENTS
QUESTION ONE ............................................................................................................................................ 3
QUESTION TWO ........................................................................................................................................... 3
QUESTION THREE ...................................................................................................................................... 4
QUESTION FOUR ......................................................................................................................................... 7
BIBLIOGRAPHY ........................................................................................................................................... 9
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QUESTION ONE
QUESTION TWO
1.1
Profit margin = Net Income x 100 = 227 500 x 100 = 18.2%
Net Sales
1.2
1
1 250 000
1
Debtor collection period = Average Accounts Receivable x 365
Credit Sales
= (160 000 / 1 250 000) x 365 = 46.72 days
1.3
Creditor payment period= Accounts Payable (Creditors) x 365
Credit Purchases
= (145 000 / 786 000) x 365 = 67.33 days
1.4
Inventory turnover = Cost of Goods Sold
Average Inventory
Average Inventory = (130 000+80 000) / 2 = R105 000
Inventory turnover = 1 250 000 = 11.9 times
105 000
1.5
Return on assets = Net Income after tax x 100 = 227 500 x 100 = 32,5%
Total Assets
1.6
1
700 000
1
Acid test ratio = Current Assets – Inventory = 386 000 - 80 000 = 2,11:1
Current Liabilities
145 000
3
QUESTION THREE
3.1
Describe, in detail, the advantages of using project management software.
Introduction
Project management helps to manage projects effectively, enabling management to resolve problems quickly.
According to (Burke, 2003), powerful but inexpensive project management software is readily available for
the personal computer. This availability has essentially moved project management computing away from the
data processing department to the project manager's desk. This represents a major shift in the management of
information. Whilst project planning software will certainly help the project manager plan and control their
projects, its application will only be effective if the planning and control techniques are clearly understood.
Conclusion
Advantages of using Project management software
1. The software is a tool that assists in doing the job more effectively and efficiently.
2. It helps to improve the chances of project completion and achieving the desired result.
3. It helps to gain a new perspective for the project, and how it aligns with the business strategy.
4. It encourages consistent communications between staff, suppliers, and clients.
5. It satisfies the different needs of the project's stakeholders.
6. It helps to mitigate risks of a project failing and increase customer satisfaction.
7. It helps to gain a competitive advantage and boost the company’s net income.
8. Project management software provides essential assistance with the level of complexity.
9. Project management software systems have the ability to calculate project information and contain
numerous built-in routines that check for user errors.
10. Excellent PC-based project management software is affordable and can be purchased for under
R2 000.
11. Project management software systems are very user friendly and can often be mastered with a minimal
amount of training.
12. It prioritizes the business' resources and ensures the efficient use thereof.
13. It helps to set the scope, schedule, and budget accurately from project start to completion.
14. It helps to stay on schedule and keep costs and resources within the budget.
15. It helps to improve productivity and quality of work.
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3.2
Distinguish between the Predictive and Iterative life cycle of a project.
Introduction
A life cycle of a project consists of different phases in a project from the initial stage until completion or
closure of the project. Project life cycles can range along a continuum from predictive approaches at one end
to adaptive or agile approaches at the other, as shown in Figure 1.
In a predictive life cycle, the project scope, time, and cost are determined in the early phases of the life cycle.
Any changes to the scope are carefully managed. Predictive life cycles may also be referred to as waterfall
life cycles.
In an iterative life cycle, the project scope is generally determined early in the project life cycle, but time and
cost estimates are routinely modified as the project team's understanding of the product increases. Iterations
develop the product through a series of repeated cycles, while increments successively add to the functionality
of the product. In an incremental life cycle, the deliverable is produced through a series of iterations that
successively add functionality within a predetermined time frame. The deliverable contains the necessary and
sufficient
capability
to
be
considered
complete
only
after
the
final
iteration
(Project Management Institute, 2017).
Figure 1: The Continuum of Project Life Cycles
Source (Project Management Institute, 2017)
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Conclusion
Predictive life cycle of a project is used when the product is clearly defined and vast knowledge is available
on how to build such a product. This is historically traditional and the most common method utilized for
projects however, it doesn't suit the circumstances of all outcomes and organizations.
Iterative life cycle of a project is used when the project operates in repetitive phases and also the understanding
of the product increases in each phase. It is comparatively complex in nature and in this type of life cycle, the
project team incorporates the feedback on every iteration and which allows the experience and expertise of
the team to increase slowly throughout the course of the project.
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QUESTION FOUR
4.1 Debtors’ collection schedule
Month
Credit Sales
June
May
20 000.00
11 000.00
June
23 600.00
8 968.00
July
23 600.00
July
12 980.00
8 968.00
19 968.00
21 948.00
4.2 Cash budget
June
July
Receipts
57 568.00
59 548.00
Cash Sales (Revenue)
23 600.00
23 600.00
Debtors (Revenue)
19 968.00
21 948.00
Rent income
14 000.00
14 000.00
Payments
48 409.33
74 309.33
Purchases
30 000.00
30 000.00
Advertising
3 776.00
3 776.00
Salaries
7 500.00
8 400.00
Rates and Taxes
25 000.00
Other operating expenses
7 133.33
7 133.33
Surplus
9 158.67
(14 761.33)
Opening cash balance
6 000.00
15 158.67
Closing cash balance
15 158.67
397.34
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Calculations
Revenue (June 2020) = (480 000 x 1.18/12) = 47 200 = (23 600 Cash + 23 600 Credit)
Revenue (May 2020) = (480 000/12) = 40 000 (20 000 Cash + 20 000 Credit)
Credit Collection for same month with discount = (23 600 x 0.95 x 0.40) = 8 968
Credit Collection for May in June = (20 000 x 0.55) = 11 000
Credit Collection for June in July = (23 600 x 0.55) = 12 980
Rent Income = (150 000 x 1.12/12) = 14 000
Salaries June = (90 000/12) = 7 500
Salaries July = (90 000 x 1.12/12) = 8 400
Advertising = (47 200 x 0.08) = 3 776
Rates and Taxes July = (500 000 x 0.05) = 25 000
Other operating expenses = (80 000 x 1.07/12) = 7 133.33
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BIBLIOGRAPHY
Burke, R. (2003) Project Management Planning and Control Techniques. 4th ed. John Wiley & Sons Ltd.
Kloppenborg, T. J. (2015) Contemporary Project Management. 3rd ed. Cengage Learning.
Project Management Institute (2017) A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE
(PMBOK® GUIDE). 6th ed, Project Management Institute. 6th ed. Project Management Institute, Inc.
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