Question 2 2.1 Passion Java is a project finance trainee who invested R25 000 in a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 2 2.1 Passion Java is a project finance trainee who invested R25 000 in a savings account at 10% per annum compounded semi-annually for a period of 4 years. Calculate the interest earned by Passion Java over the investment horizon. 2.2 White Moon Ltd produces children's toys and aims to diversify its product lines as its core product lines are experiencing sluggish growth. The company needs to obtain a new machine to manufacture a new range of wooden blocks. It has secured 2.3 (20 Marks) a 5-year financing deal with a local bank paying a before cost of debt of 10 percent interest per annum with equal annual instalments. The machine cost R1000 000. Construct an amortisation schedule for this financing deal. Masuku Ltd is evaluating a 5-year project with an operating (before tax) profit of R100 000 in the first year. The annual profit is expected to increase by 8% per year over the life of the project. The initial cost of the investment is R900 000. From year 1 to year 5, depreciation of R200 000 will be considered. The company's WACC is 15% and a tax rate of 28% applies. Required 2.3.1 Determine the operating cash flow for this project. 2.3.2 Determine the viability of the project using the NPV analysis. (3 marks) (7 marks) (5 marks) (5 Marks) Question 2 2.1 Passion Java is a project finance trainee who invested R25 000 in a savings account at 10% per annum compounded semi-annually for a period of 4 years. Calculate the interest earned by Passion Java over the investment horizon. 2.2 White Moon Ltd produces children's toys and aims to diversify its product lines as its core product lines are experiencing sluggish growth. The company needs to obtain a new machine to manufacture a new range of wooden blocks. It has secured 2.3 (20 Marks) a 5-year financing deal with a local bank paying a before cost of debt of 10 percent interest per annum with equal annual instalments. The machine cost R1000 000. Construct an amortisation schedule for this financing deal. Masuku Ltd is evaluating a 5-year project with an operating (before tax) profit of R100 000 in the first year. The annual profit is expected to increase by 8% per year over the life of the project. The initial cost of the investment is R900 000. From year 1 to year 5, depreciation of R200 000 will be considered. The company's WACC is 15% and a tax rate of 28% applies. Required 2.3.1 Determine the operating cash flow for this project. 2.3.2 Determine the viability of the project using the NPV analysis. (3 marks) (7 marks) (5 marks) (5 Marks)
Expert Answer:
Answer rating: 100% (QA)
21 The interest earned by Passion Java over the investment horizon is R4173750 This can be calculate... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
R and R patented this process with the 'Baby Boomer' generation in mind. This is the demographic of the population between the ages of 57 and 75. They are the market that is most likely to place an...
-
CHOOSE THE CORRECT ANSWER: 1. If R & S is true, then which of the following is correct? A. R is true. B. R is false. C. R could be true or false. 2. If R & S is false, then which of the...
-
R = 5 with probability 0.25, R = 0.25 with probability 0.25, R = 1 with probability 0.5. Find the arithmetic and geometric means of the random variables R for per capita production in the above...
-
Conduct a search of position announcements by companies that are recruiting expatriates for foreign subsidiaries. Based on your findings, what seem to be some of the shared features contained in...
-
Big Bobs Burgers is justifiably famous for its whopping 1-pound hamburger made with fresh ground beef and cooked to order. Together with a side of all you can eat country style French fries, one of...
-
If a bank expects interest rates to decrease over time, how might it alter the rate sensitivity of its assets and liabilities?
-
How to structure a factual investigation
-
Mark Decker has identified four stocks for his portfolio, and he wants to determine the percentage of his total available funds he should invest in each stock. The alternative stocks include an...
-
What do you know about the monetary policy of our country(India)? According to you what are steps the central bank has taken till now to control and activate the economy in the current pandemic?
-
f(x) = 2x + 3 and g(x) = -3x + 2. For the above function, use base point x0 = 1.0 and x = 0.1 to compute f and g. Find (fg) (the change in the product) by computing f(x0 + x)g(x0 + x) - f(x0)g(x0)....
-
Java language Don't copy others' answers. A new code needed to be provided. Don't use the cities.csv file attached to that assignment. Program Specifications: One of the most interesting...
-
The indicative of the stall flutter is the sign of the integral under the curve of (i) lift vs vertical displacement for plunging, (ii) moment vs angle of attack for pitching. Why? In obtaining the...
-
Construct an audit questionnaire of management performance, which could be given to members of a project team. Test this on someone who has managed you. What areas would you suggest for improvement?
-
Find for a waverider flying at \(80 \mathrm{~km}\) altitude with a Mach number of 25, find: (i) approximate lifting pressure, (ii) lift coefficient, and induced drag coefficient. Assume ideal flow.
-
Under what conditions would it be possible to have an adiabatic flow process with a real fluid (with friction) and have the stagnation pressures at inlet and outlet to the system be the same?
-
A lighter than air prolate ellipsoid moves in air with constant speed \(U\). If this air vehicle oscillates simple harmonically about its center with a small amplitude \(\mathrm{A}\) in a vertical...
-
The requirements specify which entities and data are important to the business. Here are the requirements for this database. manager monitors employee data: e mployee name, salary, and addresses...
-
Prove the following D,(cos x) = - sin x (Hint: Apply the identity cos(A + B) = cos A cos B sin A sin B)
-
Assess whether there is an excessive number of automobile accidents among interns under these altered assumptions? Explain your answer. The study is expanded to include 50 medical interns, of whom 11...
-
What precentage of infants who test positive using the test will actually have Downs syndrome? Suppose that 1 out of 500 infants are born with Downs syndrome.
-
Repeat the procedure in Problem 3.108 for each simulated patient, assuming the true efficacy of the new antibiotic is (a), 80%, (b) 90%, and (c) 95%, and compute the statistical power for each of...
-
An automobile is modeled as a single-degree-of-freedom system vibrating in the vertical direction. It is driven along a road whose elevation varies sinusoidally. The distance from peak to trough is...
-
If the ground in Fig. 3.57, is subjected to a horizontal harmonic displacement with frequency \(\omega=200 \mathrm{rad} / \mathrm{s}\) and amplitude \(X_{g}=15 \mathrm{~mm}\), find the amplitude of...
-
Derive Eq. (3.74). FT kY (1 1 + (25r) 2)2 + (25r)2. 1/2 (3.74)
Study smarter with the SolutionInn App