a) Assume that you want to have K1,000 in a year’s time and the nominal interest rate is 10%.

How much do you need to invest now to produce K1,000 in a year’s time?

b) Assume that you want to have K1000 in a year’s time and nominal interest rate is 10% and

the inflation rate of 7%. How much do you need to invest now to produce K1000 in a year’s

time?

c) Assume you need K5, 000 next year to buy a printer. The interest rate is 10% per year. How

much money should you set aside now in order to pay for the printer?

d) What is the present value of K5, 000 if the interest rate or discount rate is 7% per year for a

period of? (i) One year (ii) Two (iii) Three

E) Discuss how the wealth of shareholders can be maximised in the context of listed

company such as Zambia Sugar Plc.

F) Discuss the reasons maximisation of shareholder wealth is the primary objective of

profit oriented organisations compared with other financial objectives such as profit

maximisation, expansion of market share and increased earnings per share

Answer rating: 100% (QA)

A In order to have K1000 in a years time you would need to invest K90909 today B In order to have K1... View the full answer