Finance Answers

5.One of the following is not a Canon of good lending
a.Over the counter payment
b.Loan features
c.Retained profit
d.Letter of credit

6.One of the following is not an instrument or methods used for internal payment through the banking system within Nigeria
a.Certificate of deposit
b.Cashcard
c.Cheque
d.Creditcard

3.Which of the following is not a portion of the total receipts from the profits of a bank
a.Interest Dividends
b.Bank reserves
c.Commission
d.Discounts

4.Which of the following is not one of the parties to a bill of exchange?
a.Drawer
b.Biller
c.Drawee
d.Payee

1.An unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed determinable future time, a sum certain in money to or to the order of a specified person or bearer is known as _____________
a.Bill of Exchange
b.Banker\'s acceptance
c.Promissory Note
d.Banker\'s acceptance

2._______means the payee, or endorser of a Bill or Note, who is in possession of it or bearer thereof.
a.Drawee
b.Endorser
c.Holder
d.Possessor

Discuss the role of Nairobi Securities Exchange in the Kenyan economy (10 marks)

What are the practical difficulties of a small scale enterprise wishing to obtain credit to expand production?

Distinguish between internal and external sources of finance for a limited liability company.

A company is considering an investment proposal to install new milling controls. The project will cost Kes50,000. The facility has a life expectancy of five years and no salvage value. The company’s tax rate is 40%. The estimated cash flows from the proposed investment proposal are as follows:

Year CF
1 10,000
2 11,000
3 14,000
4 15,000
5 25,000

Compute:
a. Accounting Rate of Return and advise management if
the required rate of return is 6 %

b. Traditional Payback period and advise management
on the feasibility of the project

c. Discounted payback period at 6% discounting factor

d. Net present value at 6% discounting factor and advise
management on the project’s feasibility

e. Net present value at 15% discounting factor and advise
management on the project’s feasibility

f. Internal rate of return and explain its significance to the firm

g. Profitability Index at 10% discounting factor

Explain the various differences between forward and future contracts

A student spend $400, $700 and $ 600 in years 2, 4, and 7 on purchasing necessary stationery. The total worth of these spends in year 10 at an interest rate of 5% will be equivalent to:

An industrial setup can earn additional AED 7500 per year by installing a new production machine. If the applicable interest rate is 10% per year, how much should the company have over a 5 years to break even ?


A student spend $400, $700 and $ 600 in years 2, 4, and 7 on purchasing necessary stationery. The total worth of these spends in year 10 at an interest rate of 5% will be equivalent to:



How much money would be available in year 10 if $15000 is deposited each year in years 3 through 10 at an interest rate of 10% per year?

Different user group are interested in an entity's financial statement for different reasons.identify any four potential users groups and briefly describe the information which they may be interested in