Question: Instructions: Carefully read the information below and answer questions which are highlighted in bold letters. Company ABC Ltd. is working in Textile industry and this

 Instructions: Carefully read the information below and answer questions which are

Instructions: Carefully read the information below and answer questions which are highlighted in bold letters. Company ABC Ltd. is working in Textile industry and this company is counted in top ten companies of Pakistan with high market capitalization and quality production. The company is consistent in generating profits each year, hence its share is considered as an attractive Investment for investors. The company has captured major market shares and is very keen about its market value, because its management believes that if they will not grow they will liquidate. Why the company is focusing on its market value of share rather on Earning per share? The CEO of company has directed the Chief Financial Officer to propose an investment opportunity in the market to create more cash flows in future for fulfilling its employees pension requirements. Therefore CFO shared an investment plan with the CEO of company in which he has proposed that certain Financial Institution offers an interest rate of 18% compounded annually. If company deposits Rs. 10000000 (10 million) for 10 years, the company can generate enough funds for its employees' pension plan at this rate. Therefore there is also need to calculate how much amount will be accumulated if company agrees to avail this opportunity The company has already purchased an insurance plan for its employees. For this purpose it has to deposit Rs.400,000 at the end of each year. The company also wishes to analyze its cash position after 10 years if the expected average interest rate of market is 14% compounded annually. Furthermore another idea is to raise funds by taking long term debt from financing company. The Financing Company requires to pay back loan in equal installments at the beginning of each year. Hence if company avail this option and pays Rs. 150000 at the beginning of each year for the next 10 years to financing firm then what amount will accumulate after 10 years as company's total debt worth? Assume an interest rate of 15% compounded annually. Also calculate the current worth all these future cash flows made at the beginning of each year for 10 years

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