Finance Answers

Directions: Provide the answer to the following financial ratios problem:

NOTE: USE UP TO TWO DECIMAL PLACES ONLY

6. GROSS PROFIT MARGIN= 0.60

  INVENTORY TURNOVER= 3

  AVERAGE INVENTORY= P 450,000

  NET PROFIT MARGIN= 0.12

  NET PROFIT= ?

7. CURRENT RATIO = 4

  DEBT RATIO= 0.2

  EQUITY= P 600,000

  NONCURRENT ASSETS= P 200,000

  NONCURRENT LIABILITIES= ?

8. AVERAGE DAYS IN INVENTORY= 20

  INVENTORY TURNOVER= ?

9. CURRENT LIABILITIES= 50% OF TOTAL ASSETS

  CURRENT ASSETS= 75% OF TOTAL ASSETS

  CURRENT RATIO= ?

10. NET PROFIT= P 300,000, MARGIN= 0.1

   INCOME TAX EXPENSES= 25% OF OPERATING PROFIT

   OPERATING PROFIT MARGIN= ?

Assignment 1.(a)Discuss what a financial system is and the key role that any financial system plays in an economy. ,(b)What are the main reasons for regulating financial institutions and how do the regulators do this?.

General guide :

Assignment should be at least 4 pages excluding the title page and references

Spacing should be at least 1.5

Attach the “turn it in certificate”

(50marks)

Assume that you just won the state lottery. Your prize can be taken either in the form

of $40,000 at the end of each of the next 25 years (that is, $1,000,000 over 25 years)

or as a single amount of $500,000 paid immediately.

a) If you expect to be able to earn 5% annually on your investments over the next

25 years, ignoring taxes and other considerations, which alternative should

you take? Why?

b) Would your decision in part a) change if you could earn 7% rather than 5% on

your investments over the next 25 years? Why?

c) On a strictly economic basis, at approximately what earnings rate would you

be indifferent between the two plans?

RHA fund invested in 1,000 units of 7 percent, 15-year, RM1,000 bond issued by CMX Bhd. The bond was issued on 1/11/2018 at par. The firm bought the bonds on 1/11/2021 when the bond was selling at 2% discount. The firm intends to sell back all the bond when the interest rate is expected to be at 5% on 1/11/2026. Throughout the period of holding the bond, the firm reinvest all the coupons received in an investment alternative that pays 8 percent interest for the 1^st 3 years and 9 percent interest for the remaining years. You are required to assist RHA fund to determine:

i) their total yield from this bond investment

ii) total capital gain from this investment 

Discuss what a financial system is and the key role that any financial system plays in an economy. What are the main reasons for regulating financial institutions and how do the regulators do this? 15marks

Question 1

Discuss what a financial system is and the key role that any financial system plays in an economy. What are the main reasons for regulating financial institutions and how do the regulators do this?.

General guide :

Work should be at least 4 pages excluding the title page and references.

50marks

After retirement, Nguyen wants to open a Corona Spa. He is planning to retire in the next 30

years. He wants to be able to draw out of his savings 30 years after retirement an amount of

300 mil VNĐ per year. How much would he has to pay in equal annual deposits until

retirement to meet his objectives? Assume interest remains at 3%

Smokeless cigarettes may be replacing conventional cigarettes in the future. Discuss pros and cons of e-cigarettes and offer reasons for their merits and disadvantages.

at this price buyers want to purchase 40,000 burgers less than the 60,000 hamburgers producers are willing to offer graph the market surplus occurs explain the market surplus among the seller

ABBA Corp has issued ABBA Bond on discount on April 6, 2010. This 8 percent bond is

redeemable at par on April 6, 2030, or on any optional redemption date. The expected

yield of the bond on the date of issue was 10 percent p.a. Coupon for the bond is paid

quarterly. The earliest possible ABBA Corp could redeem the whole bond (but not in part)

is at the end of its 12-year deferment period with a 12 percent call premium. An investor

has decided to purchase this bond today, December 21, 2019, when the interest rate has

increased by 2 percent (from the last known rate).

i) Compute his current yield on the date of purchase.

ii) Compute his yield to call.