1. TZco. ltd is investing in machinery that costs $ 60,000,000, it expects to earn $ 30,000,000...
Question:
1. TZco. ltd is investing in machinery that costs $ 60,000,000, it expects to earn $ 30,000,000 in year 1, $ 40,000,000 in year 2; $ 23,000,000 in year 3 the required rate of return is 6%. How much wealth will this company have accumulated at the end of the year 3? Is this business worth investing in?
2. Suppose that $ 50,000,000 is placed in a savings account of a bank at an 11% interest rate per anum. How much shall it grow at the end of 9 years?
3. An investor wants to raise $ 40,000,000 for 8 years; how much should he save every year at an interest rate of 20% to raise this money?
4. Prepare a cash budget for M/s Novan Television & Co. on the basis of the following information for the first six months of 2014:
(a) Cost and prices unchanged.
(b) Cash sales - 25% and credit sales - 75%.
(c) 60% of credit sales are collected in the month after-sales, 30% in the second month, and 10%
in the third. No bad debts are anticipated.
(d) Sales (USD)forecasts are as follows:
| October 2013 | 1,200,000 | March 2012 | 800,000 |
| November 2013 | I,400,000 | April 2012 | 1,200,000 |
| December 2013 | 1,600,000 | May 2012 | 1,000,000 |
| January 2014 | 600,000 | June 2012 | 800,000 |
| February 2014 | 800,000 | July 2012 | 1,200,000 |
(e) Gross profit margin 20%.
(f) Anticipated purchases (USD):
| January 2014 | 640,000 |
| February 2014 | 640,000 |
| March 2014 | 960,000 |
| April 2014 | 800,000 |
| May 2014 | 640,000 |
(g) Wages and Salaries (USD)to be paid:
| January 2014 | 120,000 |
| February 2014 | 160,000 |
| March 2014 | 200,000 |
| April 2014 | 200,000 |
| May 2014 | 160,000 |
| June 2014 | 140,000 |
| July 2014 | 120,000 |
Expert Answer:
Question 1 TZco Ltd is investing in machinery that costs 60000000 The expected earnings are 30000000 ... View the full answer
