Finance Answers

Mr. Javed approached Islamic Bank to purchase a house built at DHA Phase VIII on 1,000 sq yards. The total value of the house is Rs. 25 Million. He only has 04 Million and wants Islamic Bank to invest the rest, which Islamic Bank agrees. 

 Mr. Javed agrees to purchase the Islamic Banks’s share in the house in 05 years' time on a monthly basis. Profit rate is 14%. Required:

1.    What mode of finance will be used in this case? Write down the all steps and agreements which will be involved in this transaction.

2.    Provide the cost of 01 unit, rent per unit, monthly payments for first 05 months (rent + unit cost).

3.    Who will be the responsible for any damages happened with the house during the financing period and why? 

How are management accounting and cost accounting related?

Why do accountants, just like other professionals, need to comply with the ethical standards?

Discuss and analyze the following transactions for X Ltd, using the concept of accounting equation (Assets, Liabilities and Equities).

Discuss and analyze the following transactions for X Ltd, using the concept of accounting equation (Assets, Liabilities and Equities). 1. Purchased Furniture for Rs675000 2. Capital Introduced by the business Owner by depositing 12 Lakhs in the bank account 3. Goods purchased on credit from Aman Enterprises for Rs10500

Walter and Gordon model analyse the impact of distribution of dividends on the valuation of the firm but the formula used in both the cases are different. Company

ABC Ltd wanted to evaluate the price of the share in both cases. The company earns ₹ 50 per share and expects the same for the next year. The cost of capital to the firm is 11%. The company earns return on investment of 15% and the firm is planning dividend payout ratio of 60%. Calculate:

a. Price of the share using Walter Model. Comment on the relationship between return on investment and cost of capital in the case above and decision of the firm whether dividend is to be declared or not.

b. Price of the share using Gordon model. Comment on the relationship between return on investment and cost of capital in the case above and decision of the firm whether

dividend is to be declared or not.

1. Mrs Alis is an intelligent business woman. She makes her investments after a very thoughtful process. In January 2018 , her manager has shown her some projects with the following details 

Option A

Investment into a towel business that initially cost $200,000 and then will generate cash inflow of $24000 per year for the next 10 years

Option B

Investment into a detergent business that initially cost $190,000 and then will generate cash inflow of $20,000 for each of next 12 years. 

The rate of return associated with both the investments is 12%. 

a. Calculate net present value (NPV) and internal rate of return (IRR) of both the investments. 

b. Comment on which investment Mrs Alis should pick on the basis NPV and IRR.

LOANED 150 000 TO A FARMER

Jonathan’s Enterprises purchases $4,562,500 in goods per year from its sole supplier on terms of 2/15, net 50. If the firm chooses to pay on time but does not take the discount, what is the effective annual percentage cost of its non-free trade credit? (Assume a 365-day year.)

We are all concerned with the serious health impacts of the escalating pollution problem in a country like India where regulation oversight is comparatively lax and penalties & punishments too few and far? Identify and select any one pollution reducing/mitigating initiative practiced and embedded in its business by a listed company that impresses you. Explain this initiative along with the short term & long term positive impact of the same on the environment & people. (refer to Sustainability Report and/or Business Responsibility Report of the company)