Finance Answers

2. Sam (20 years old) and Peya (30 years old), starts to work at UNAM today. Sam invests N$ 2500 per month and Peya invest N$ 3500 per month in a retirement fund. Suppose both have to retire at the age of 65, and assume the fund give returns of 9% per annun, compound monthly. (a) Find the value of their investment when they retire. [6] (b) If Peya is to accumulate the same amount as Sam on the retirement date, how much should Peya contribute per month to the fund to achieve that?. [3] (c) Peya decide to invest N$ 4500 per month in the fund. At what age Peya will accumulate the same amount as Sam? [3] (d) Suppose Sam invest N$ 3000 per month only for the first ten years and to leave the final amount in the fund for the remaining years until his retirement. Find his final value of retirement when he retires.

1. The net profit before taxes as per the profit and loss account, of Gaman Ltd is Rs 269244. With the given set of information, classify the given items as (operating / investing / financing), share the correct classification with logical reasoning

And calculate the cash flow from operating activities

Loss on sale of asset

95780

dividend income

26000

interest income

35000

finance cost paid on debentures

12000

gain on sale of investment

45000

Depreciation on fixed assets

85000

Amortisation Expenses

110000

Raffles Bank pays 4% simple interest on its deposit account, whereas Bugis Bank pays interest on its deposit account compounded monthly. Formulate the quoted and effective interest rates that Bugis Bank should set if it wants to match Raffles Bank, assuming a 5-years horizon period

Capital budgeting can be described as the mechanism by which businesses determine the purchasing of major fixed assets such as machinery, equipment, and buildings, as well as the acquisition of other businesses, either through the purchase of equity shares or a group of assets, to conduct ongoing operations. Discuss any five of the basic techniques of capital budgeting

Given the Earnings before interest and taxes(EBIT) is Rs 30000 Interest payment is Rs 10000

Dividend on the preference shares Rs9000

Taxes being 50% of the profit before taxes(PBT).

Number of outstanding equity shares 10000

  Weightage

For Numerical Answer

Assessment Parameter Weightage Understanding and usage 20%

of the formula

Procedure / Steps 50%

  20% Conclusion 20%

Correct Answer Interpretation

& 30%

What would be the earning per share(EPS) and degree of financial leverage (DFL), What would be the change in EPS, and DFL, if the EBIT increases to Rs50000 and Rs80000

Note- you have to calculate three EPS and three calculations for DFL

assume that an investor is willing to pay $908.32 for a bond (pv 1000, coupon rate 8%, maturing in 20 years)

what is the investor's required rate of return, k_d ? 9

(bond issuer's viewpoint) what if the net price after flotation costs is $850, what then will k_d be? 9.73

what is the after-tax k_d assuming tax rate of 30% ?

assume that an investor is willing to pay $908.32 for a bond (pv 1000, coupon rate 8%, maturing in 20 years)

what is the investor's required rate of return, k_d?

(bond issuer's viewpoint) what if the net price after flotation costs is $850, what then will k_d be?

what is the after-tax k_d assuming tax rate of 30%?

. An investor expects to receive Rs 572750, at the end of 20 years to keep his retirement life happy. Discuss how much money he should invest in lump sum to meet his expectation at the given prevailing interest rate of 10% per annum. Discuss the concept of time value of money you applied here.

3.b. How much wealth Rs 20000 would produce if it’s invested in a fixed deposit for a tenure of 12 years at an interest of 8% per annum. Also, discuss the concept of compounding and

calculating the future value of money.

Danika received a dividend of $0.37 per share. determine how much she will receive in total if she owns 720 shares?