Question 1 1.1 By giving relevant examples from Moyondizvo Ltd, clearly discuss the basic types of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 1 1.1 By giving relevant examples from Moyondizvo Ltd, clearly discuss the basic types of financial management decisions. (No Calculations are required) (20 Marks) 1.2 Why are the concepts of risk and time value of money important in making financial management decisions identified on question 1.1 (8 marks) INFORMATION Moyondizvo Ltd is a listed company and its ordinary shares are trading at R25 per share (500 000 shares in issue). The company also has 20 000 bonds (par value of R1 000) in issue, which is currently trading at R750. The bonds mature in 20 years and pay a 10% coupon. Moyondizvo has a substantial amount invested in short term securities expected to mature in three months' time. Moyondizvo normally utilises returned earnings before other sources of financing. Additionally. the company has fixed assets worth R1 million and expected to depreciate at 20% per annum. Moyondizvo directors have recently had the opportunity to discuss a new project plan that needs an initial investment of R250 000 for new equipment and is expected to produce positive cash flows over a five-year term (8 marks) 1.3 Explain Four (4) reasons why profit maximisation is not always the key motivator (4 marks) in project finance Question 1 1.1 By giving relevant examples from Moyondizvo Ltd, clearly discuss the basic types of financial management decisions. (No Calculations are required) (20 Marks) 1.2 Why are the concepts of risk and time value of money important in making financial management decisions identified on question 1.1 (8 marks) INFORMATION Moyondizvo Ltd is a listed company and its ordinary shares are trading at R25 per share (500 000 shares in issue). The company also has 20 000 bonds (par value of R1 000) in issue, which is currently trading at R750. The bonds mature in 20 years and pay a 10% coupon. Moyondizvo has a substantial amount invested in short term securities expected to mature in three months' time. Moyondizvo normally utilises returned earnings before other sources of financing. Additionally. the company has fixed assets worth R1 million and expected to depreciate at 20% per annum. Moyondizvo directors have recently had the opportunity to discuss a new project plan that needs an initial investment of R250 000 for new equipment and is expected to produce positive cash flows over a five-year term (8 marks) 1.3 Explain Four (4) reasons why profit maximisation is not always the key motivator (4 marks) in project finance
Expert Answer:
Answer rating: 100% (QA)
11 Basic types of financial management decisions A financial decision is considered with allocation of capital and how funds are to be raised from various long term sources of fundsFinancial decision ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Starc Enterprises is a listed company and its ordinary shares are trading at R25 per share (500 000 shares in issue). The company also has 20 000 bonds (par value of R1 000) in issue, which is...
-
Why is understanding the time value of money important for tax planning?
-
What are the three most basic types of financial decisions managers must make?
-
Find the value of each. If a limit does not exist, state DNE. y = g(x) a) lim g(x) = z-1+ m lim g(x)= z-1- lim g(x)= 241 b) g(1) = c) Is g continuous at x =1 Select an answer d) lim g(x) = 24-2 No,...
-
Jay is currently using an old version of point-of-sale (POS) software and he wants you to create the spreadsheet shown in Fig. 11-15 to evaluate the alternatives for a new system. Jay has weighted...
-
Write a program in \(\mathrm{R}\) that simulates five samples of size \(n\) from a distribution \(F\), where \(n\) and \(F\) are specified below. For each sample compute a kernel density estimate of...
-
Describe the role of an organizations personnel in compliance and antifraud efforts.
-
Adarmes Adventures manufactures aluminum canoes. In planning for the coming year, CFO Alexis King is considering three different sales targets: 2,500 canoes, 3,000 canoes, and 3,500 canoes. Canoes...
-
Select multiple Hadoop, NoSQL, and NewSQL products and conduct a detailed comparison of the similarities and differences between the tools that you select. For NoSQL products, include key-value pair...
-
Angela Petrillo recendy opened her own law office, which she operates as a corporation. The name of the new entity is Angela Petrillo, Attorney. Petrillo experienced the following events during the...
-
Suppose that the slope of the Capital Market Line is 0.8, the annual return variance of the Optimal Tangent Portfolio is 0.04, and the annual risk-free rate is 0.01 (i.e., =1%). Find the annual...
-
The host country is Thailand and the entry mode is joint-venture. The product to launch to Thailand is iPhone. Now that you have acquired knowledge about Motivation, Leadership, and HR management...
-
mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA." a. Economically speaking, do you think that the idea of survival of the fittest is the best...
-
true-to-life conflict scenario based on your own personal or work life experience, a friend or family member's experience, or a newsworthy story. You use your created scenario on discussions...
-
Balance each of the following reaction equations. If no coefficient is needed, leave the line blank. 1) CH2(g) + H2(g) CH6(8) 2) C(s) + H2O(g) CH4g) + CO2(g)
-
Mr. A is a VAT-registered professional offering accounting services to his clients in 2022. The following data were reported from his income statement: First Quarter Second Quarter Professional...
-
An employee has an average wage of $60,000 and has worked for the firm for 28 years. The defined benefit pension plan pays retirees 2.3%. The average wage times the years of service. How much can...
-
A fast-food restaurant averages 150 customers per hour. The average processing time per customer is 90 seconds. a. Determine how many cash registers the restaurant should have if it wishes to...
-
The Riverview Hotel is a deluxe four-star establishment. Late on Friday, it had 20 of its 300 rooms available when the desk clerk received a call from the Pines Hotel. The Pines Hotel made a booking...
-
The Antikron Company produces rubber seals used in the aerospace industry. Standards call for 3 pounds of material at $2.50 per pound for each seal. The standard cost for labor is 1.5 hours at $15...
-
Auburn Banking and Loan Company has six service departmentshuman resources, duplicating, janitorial, accounting, graphic design, and food serviceswhose costs are allocated to the companys two...
-
Light focusses onto a point I from a point \(\mathrm{O}\) after reflecting off a surface that completely surrounds the two points, as shown in cross section below. The shape of the surface is such...
-
Consider the ray shown bouncing off the bottom of the surface in the preceding problem. Replace the surface at this point by the more highly-curved surface shown in dotted lines. The ray still...
-
When bouncing off a flat mirror, a light ray travels by a minimum time path. (a) For what shape mirror would the paths of all bouncing light-rays take equal times? (b) Is there a shape for which a...
Study smarter with the SolutionInn App