Financial Math Answers

A client approaches you with the news that she plans to retire on a ranch worth R3000000. She plans to save every year for 20 years. How much must she save at the end of each year if the interest rate is 12% per annum? (Round off the answer to the nearest rand.).

Lemmon has EAT, depreciation expense, capital expenses, debt and debt principal payments of $9m, $2.8m, $40m and $1.5m respectively. Between the first and the second years, it has current assets of $11m and $13.4m and current debts of $5m and $6.1m respectively. its unlevered beta, D/E and t are 3, 40/60 and .4 respectively. The t bond rate is at 2% and the risk premium is 8%and its sales are $90m. Derive the value of lemon

A loan is granted at 21,6 % p.a. compounded daily. It is repaid by means of regular, equal payments of R1500 made every four months, where the first payment is made one year after the loan is granted. If the last payment is made exactly five years after the loan is granted, then the value of the loan, to the nearest cent, is R

The treasurer of Company ABC expects to receive a cash inflow of $18,000,000 in 90 days. The treasurer expects short-term interest rates to fall during the next 90 days. To hedge against this risk, the treasurer decides to use an FRA that expires in 90 days and is based on 90-day LIBOR. The FRA is quoted at 6%. At expiration, LIBOR is 4.8%. Assume that the notional principal on the contract is $18,000,000.

 Calculate the gain or loss to Company ABC as a consequence of entering the FRA

find the intetest rate if $5000 is borrowed and $5243.75 is paid back 9 months later

In its first year, “Abol Buna Co” had the following experience Sales = 25,000 units

Selling price = br.100 TVC = br.1, 500,000 TFC = br.350, 000. Required:

(a) Develop Revenue, cost & profit functions for the co. in terms of quantity.

(b) Find the Breakeven point in terms of quantity

(c) Convert the cost equation in terms of quantity in to a cost equation in terms of revenue

(d) Find the Breakeven revenue

(e) If profit had been br. 500,000 what would have been the sales volume (revenue) &

the quantity of sales

(f) What would have been the profit if sales are br. 2,000,000?

A company had closed it books with plant, property and equipment amounting to US$3,500mn for year ending in Dec 2020. The company had revenue of US$5,500mn for the same period. During the quarter ended March 2021 and June 2021 expected to clock a revenue of US$6500mn, and US$7500mn respectively. It has incurred US$550mn towards capital expenditure for the same period. The company is charging depreciation 10% for the asset for the quarter. What would be closing balance of plant property and equipment for June 2021

A company has intangible assets of US$1500mn as on Dec 2020. The company in its 10-K mentioned that for the year 2021 company it will be writing off US$500mn. Assuming there is no capex addition for the year, which of the following amount would represent closing amount of intangible by end June 2021

1. You are the lucky winner of your state’s lottery of $6 million after taxes. You invest your winnings in a five-year certificate of deposit (CD) at a local financial institution. The CD promises to pay 8 percent per year compounded annually. This institution also lets you reinvest the interest at that rate for the duration of the CD. How much will you have at the end of five years if your money remains invested at 7 percent for five years with no withdrawals

A married couple, purchased their home in December 1989 for R289 000. The house was appraised in January 2008for R927 00. What was the annual rate of appreciation on the home during this period ?