Finance Answers

If the cost of production of Hula Hoops increases the supply curve will 

You just won the Florida lottery. To receive your winnings, you must select one of the two following choices: 

i. You can receive $1,000,000 a year at the end of each of the next 30 years; 

 ii. You can receive a one-time payment of $15,000,000 today. Assume that the current interest rate is 6%. Which option is most valuable?   

You just won the Florida lottery. To receive your winnings, you must select one of the two following choices: 

i. You can receive $1,000,000 a year at the end of each of the next 30 years; 

 ii. You can receive a one-time payment of $15,000,000 today. Assume that the current interest rate is 6%. Which option is most valuable?   

If you are a branch manager of an Islamic bank. A customer who owns a garment factory comes to you and wants to purchase cotton from market for making the garment for which he asks your bank for Rs. 5 million for one year. 

Required: 

1. How will you meet this requirement according to the procedure used in Islamic Bank? Write down all these procedures step by step. 

2. If your bank wants to earn 10 percent annual profit on Rs.5 million and the purchase of cotton has cost Rs.50,000 then how will this profit be calculated?

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.