Finance Answers

Criteria Investment X InvestmentY

NPV R44 000 −R22 000

PI 1,945 0,071

IRR 16,00% 8,04%

Which investment(s) should you choose, taking all the above criteria into consideration, if the cost of capital is equal to 12% per year? [1] X [2] Y [3] Both X and Y [4] Neither X nor Y [5] Too little information to make a decision

Years After-tax income R

1 200 000

2 500 000

3 300 000

4 400 000

5 700 000

6 300 000

If the average rate of return is 8,421%, then the original investment (rounded off to the nearest R1 000) was [1] R2 400 000. [2] R4 750 000. [3] R40 000. [4] R1 497 000. [5] none of the above. 

Year Cash inflow (R)

3 45 000

6 90 000

9 115 000

The applicable interest rate is 11,59% per year. The present value of  the cash outflows is R95 000

The MIRR is

[1] 21,25%. [2] 31,90%. [3] 38,06%. [4] 41,91%. [5] 14,72%

Year Cash inflow (R)

3 45 000

6 90 000

9 115 000

The applicable interest rate is 11,59% per year. The present value of  the cash outflows is R95 000

The future value of the cash inflows is approximately

[1] R326 950. [2] R271 470. [3] R169 330. [4] R218 000. [5] R250 000

Consider Bond XYZ

Coupon rate: 9,75% per year

Yield to maturity: 11,4% per year

Maturity date: 15 April 2046

Settlement date: 29 November 2021

The clean price is

[1] R88,77706%. [2] R81,69720%. [3] R85,22964%. [4] R86,37296%. [5] R86,39294%

Consider Bond XYZ

Coupon rate: 9,75% per year

Yield to maturity: 11,4% per year

Maturity date: 15 April 2046

Settlement date: 29 November 2021

The accrued interest is

[1] R1,20205%. [2] R2,34537%. [3] R5,87781%. [4] R1,18207%. [5] none of the above

Down-To-Earth sells houses. The following table represents the selling price of a house (y) in thousands of rands and the number of houses sold at that price (x):

x 5 15 19 7

y 500 900 1500 2 000

The correlation coefficient of a linear regression between x and y is approximately

[1] 5,72.

[2] −0,16.

[3] 0,16.

[4] 4,00.

[5] none of the above

Down-To-Earth sells houses. The following table represents the selling price of a house (y) in thousands of rands and the number of houses sold at that price (x):

x 5 15 19 7

y 500 900 1500 2 000

The standard deviation for the number of houses sold is

[1] 6,6.

[2] 4,0.

[3] 11,5.

[4] 5,7.

[5] none of the above.

The following figures show the profit of a greengrocer for the past five years: R360 000, R550 000, R200 000, R80 000 and R700 000. The arithmetic mean of the data is

[1] R225 424. [2] R252 032. [3] R1 890 000. [4] R378 000. [5] none of the above

The next coupon date that follows the settlement date of a bond is 28 October 2021. The half-yearly coupon rate is 7,375%. The accrued interest equals R5,49589%. If this is a cum interest case, the settlement date for this bond is

[1] 11 September 2021. [2] 14 June 2021. [3] 30 July 2021. [4] 29 August 2021. [5] none of the above.