Finance Answers

Assume that your father is now 55 years old and plans to retire after 5 years from now. He is expected to live for another 15 years after retirement. He wants a fixed retirement income of Rs. 1,00,000 per annum. His retirement income will begin the day he retires,

5 years from today, and then he will get 14 additional payments annually. He expects to earn a return on his savings @ 10% p.a., annually compounding. How much (to the nearest of rupee) must your father save today to meet his retirement goal?

Equipment A costs 400 and has operating costs of 400 per year. Equipment B has a cost of 340 and annual costs of 120. At what interest rate are you indifferent in cost if both will last 3 years.

The recent Covid-19 pandemic has turned the world upside down with several businesses shutting shop owing to mounting losses. Yet, in these pandemic times, e-commerce is one twinkling star that has been gathering strength after strength.How has Direct Selling Experience via Amazon India helped small scale manufacturers of handicrafts or any other item of your choice during these pandemic times? As an external consultant, try to analyze the reasons behind the success of these small-scale manufacturers.Provide some statistics on how technology has made the lives of small-scale manufacturers simpler?In your opinion, do you see this as a future once the Covid-19 crisis gets over or do you see manufacturers trying to sell their handicraft/other products face to face again?

The table below shows information about the closed economy.

Real GDP (RM million) Aggregate Expenditure (RM million) 

850 880

900 920

950 960

1000 1000

1050 1040

a) If the full employment level of income is RM1, 350 million,

i) state whether the above economy is facing an inflationary gap or deflationary gap. Give your reason.

ii) what is the effect of the gap that you named in [a(i)] to the above economy.

iii) calculate the required aggregate expenditure changes needed to eliminate the inflationary gap or deflationary gap.

b) If the full employment level of income is RM850 million,

i) state whether the above economy is facing an inflationary gap or deflationary gap. Give your reason.

ii) what is the effect of the gap that you named in [b(i)] to the above economy.

iii) calculate the required aggregate expenditure changes needed to eliminate the inflationary gap or deflationary gap.

What is the cost of debt capital given the following information?

Number of bonds = 1,000,000

Face value = 1,000

Current price = 1,100

Coupon rate = 9% semiannually

Years of maturity = 15 years

Every government is expected to perform some key economic roles to ensure sustainable development and improve welfare of the citizenry. Discuss the 4 key economic functions performed by the government of Ghana, indicating how satisfactory or not (with sufficient evidence backing your stands) the current government of Ghana has performed each role.

Calculate for the yield to maturity given the following information

Number of binds = 1,000,000

Face value = 1,000

Current price = 1,100

Coupon rate = 9% semiannually

Years of maturity = 15 years

1.      Denmark GDP analysis

1.1. Download GDP quarterly data from FRED database and calculate min, max and average values. Grade: 20 %

DATA SOURCE: https://fred.stlouisfed.org/series/CLVMNACSCAB1GQDK

1.2. Implement linear trendline, indicate equation and R squared on the chart. Grade: 10 %

Calculate quarterly volatility of natural logarithm of GDP (LN(GDP))

Assume that Mr. Binda is a speculator who buys a 90-day British ^{Pound call option with a strike} price of $27.02. Assume one option contract specifies 10,000 units and the current spot price as of that date is $26.87. Mr. Binda pays a premium of $0.05 per unit for the call option and no other charge (such as brokerage fee). Just on the expiration date, the spot rate of a pound reaches $27.18.

Required:-

a) Determine the profit or loss if the option is exercised,

b) Determine the value of the call option lithe option is exercised.

Suppose you are considering opening a deli in Rockville Centre. After looking at many potential locations, you find one which you believe is ideal. You purchase the location of a former CVS store. The purchase price of the building was $475,000. In addition, you need to invest another $200 to make the location suitable as a deli store. Assume these capital investments have an average life of five yrs with a $50,000 salvage value 

You estimate your initial investment in working capital is $145,000.  Assume going forward that net working capital is 25% of sales

You estimate first-year sales of $2,300,000 and you expect sales to increase at an annual rate of 2.3%. Your year 1 (2021) cost of goods (COGS) is estimated at 64% of sales and that percent declines 2% annually for the following four years.Your year 1 (2021) annual rent, utilities, insurance and other related costs (SG&A) is $175,000 per year and increases by $2,500 annually for the following four years.