Finance Answers

One of your team members is struggling with preparation of balance sheet and he needs your assistance in completing it. He has come up with following missing information. You are required to complete this Balance sheet.
Assets Liabilities & Equity
Cash $ 100,000 Current Liabilities
Receivables Long Term Debt
Inventory Total Debt
Plant Common Equity $ 600,000
Total Assets Total Claims

Current Ratio is 2.5 ; Average Collection Period is 54 days ; Total Debt to Total Assets 40 percent ; Total Asset Turnover is 2 ; Inventory Turnover 5.

Q1) For a and b
- Define and identify the type of Income / Expenses
- Treatment of the Income / Expenses in the Profit and Loss account, Impact of the Income / Expenses in the Balance Sheet

a. You purchased 10 shares of L& T Company last year. On 5th March 2019, the company has declared a dividend Rs 50 per share. The income is earned but not yet collected in your account during this financial year.
b. On 5th March 2019, Mehta Brothers received 100% advance for goods, to be supplied in the next month. The Cost of the goods was Rs50000. They usually sells the goods at 10% mark up.

a. Do you see any problems in economic resources being distributed globally?
b. If yes, what? How?
c. Can you suggest remedies to the problem?

As a manager of a firm, you are concerned about a potential change in interest rates, which would affect money market prices. An economic report has recently highlighted the following economic conditions: (i) Bank Negara Malaysia is expected to keep the Overnight Policy Rate (OPR) unchanged in 2021; (ii) Budget deficit is expected to decline slightly in 2021; and (iii) The yield curve in Malaysia currently exhibits a consistent downward slope. Assuming that money market prices are not exposed to credit risk, how will money market prices change based on the report? Explain.

What might be the objective or objectives of each of the following nonprofit institutions?
1.The engineering college at a major state university
2.A police department in a city
3.The emergency room of a hospital
4.A museum

Pharmos Incorporated is a Pharmaceutical Company which is considering investing in a new production line of portable electrocardiogram (ECG) machines for its clients who suffer from cardio vascular diseases. The company has to invest in equipment which cost $2,500,000 and falls within a MARCS depreciation of 5-years, and is expected to have a scrape value of $200,000 at the end of the project. Other than the equipment, the company needs to increase its cash and cash equivalents by $100,000, increase the level of inventory by $30,000, increase accounts receivable by $250,000 and increase account payable by $50,000 at the beginning of the project. Pharmos Incorporated expect the project to have a life of five years. The company would have to pay for transportation and installation of the equipment which has an invoice price of $450,000.

Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three projects are project A, project B and project C. Given the following cash flow information, calculate the payback period for each. If CGC requires a 3-year payback before an investment can be made, which project(s) would be accepted?

Year Project A ($) Project B ($) Project C ($)
0 (Investment) -1,000 -$10,000 -$5,000
1 600 4,000 2,000
2 300 3,000 1,000
3 200 2,000 2,000
4 100 2,000 1,000
5 500 4,000 2,000

The cost of a machine is $400000.The machine can be used for 6 years.The salvage value of the machine is 25% of the cost of the machine.Tabulate the net depreciation and book value of the machine for each year by sinking fund method.The interest rate is 12% compounded annually

.1.What will my investment of R100 500 be worth if my bank pays me simple interest of 9% per annum and I invest my money for 180 days?