Finance Answers

Inflation has remained low for the past three years but you have come to the conclusion that trend is ending and inflation will increase significantly over the next 18 months. Assume you have reached this conclusion prior to other investors reaching the same conclusion. What adjustments should you make to your bond portfolio in light of your conclusions

. You need to have $50,000 at the end of 10 years. To accumulate this sum, you have decided to save a certain amount at the end of each of the next 10 years and deposit it in the bank. The bank pays 8 percent interest compounded annually for long-term deposits. How much will you have to save each year (to the nearest dollar)?

On May 1 Blake started a business and deposited Ksh 5,000,000 into a bank account opening specifically for the business.

a)     Assume on May 3 2006 Blake buys a building for Kshs. 3,000,000 paying by cheque.

b)     Blake purchased goods for resale for Kshs. 500,000 on account and agrees to pay after one week.

c)     May 6 goods that had cost Blake Ksh 100,000 were sold to Brown for the same amount on account. Brown becomes a debtor

d)    On May 13 goods which had cost shs 50,000 were sold to Dolley for the same amount and she paid immediately by cheque

e)     On May 15 Blake pays a cheque for shs 200,000 to Smith in part payment of the amount

• owing.

f)      J. Brown who owed Blake Ksh 100,000 makes part payment of Ksh. 75,000 by cheque on May 20 2006

Required

Prepare the initial financial statement position, make the effect the transactions on the statement and prepare the final Statement of financial position.

Keynesian approach to the demand for money

Suppose we have an annuity with 5 annual payments of

Rs.5000 each, starting at the beginning of the year, and the

interest rate is 10% per year. The future value of annuity is

What is industrialisation?

Managers and owners of business may not have same objective . explain with possible conflicts of interest

Financial services sector can be divided into three groups of institutions, those engaged in deposit taking, contractual savings and other investment funds.Discuss

1. Anuradha Sharma, a start up entrepreneur from Bareilly,

has invested Rs 80 lacs in an apparel retail store. Business

has been good, and the store shows an accounting profit of Rs

10 lacs for the last year. This profit is after taxes and after

payment of a Rs 20 lacs salary to Ms. Sharma. This salary is

less than what she could make at another job, which is about

equal to Rs 40 lacs. Considering the risk involved in the

fashion retail business post Covid'19, she believes that a 15

percent after-tax rate of return is appropriate for this type of

investment. (20 marks)

a.

Given this information, calculate the economic profit

earned by Ms Sharma.

b.

What accounting profit would the firm have to earn

in order for the firm to break even in term of economic

profit?

1. Anuradha Sharma, a start up entrepreneur from Bareilly,

has invested Rs 80 lacs in an apparel retail store. Business

has been good, and the store shows an accounting profit of Rs

10 lacs for the last year. This profit is after taxes and after

payment of a Rs 20 lacs salary to Ms. Sharma. This salary is

less than what she could make at another job, which is about

equal to Rs 40 lacs. Considering the risk involved in the

fashion retail business post Covid'19, she believes that a 15

percent after-tax rate of return is appropriate for this type of

investment. (20 marks)

a.

Given this information, calculate the economic profit

earned by Ms Sharma.

b.

What accounting profit would the firm have to earn

in order for the firm to break even in term of economic

profit?