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Oh god !
I feel so secured with these expainations. Thank you so much sir.At last sir can you just clear me with this question. How do we know when to use the present value table and when to use the cumulative discount table? Im so confused in that.
A landlord receives a rent of $1000 to be received over ten successive years. The first payment is due now. If interest rates are 8% what is the present value of this income?
The answer given is $7,247
How did this answer arrive !An educational authority is considering the implementation of a CCTV security system in one of its schools. Details of the proposed project are as follows :
Life of the project 5 years
Initial cost $75,000Annual savings :
Labour costs $20,000
Other costs $5,000NPV at 15% $8,800
What is the internal rate of return for this project?
The answer given is 20%.
How did this answer arrive !(03) G plc plans to borrow $50,000 with a ‘mortage style’ repayment pattern where the same amount os repaid each year. This payment is a mixture of capital ans interest and ensures no additional loan repayment is required at the end. What is the annual repayment on a bank loanbof $50,000 over eight years at 9% ?
The answer given is $9,033.
How did this answer arrive !(02) How much would need to be invested today at 6% per annum to provide an annuity of $5000 per annum for ten years commencing in five years’ time?
The answer given is $29,150.
How did this answer arrive !Hi sir !
I’m having quiet alot of questions to be solved before I attend my BA1 exam this saturday. Hope you will help me to sort them out as soon as possible.(01) A building society adds interest monthly to investors’s accounts even though interest rates are expressed in annual terms. The current quoted rate of interest is 6 percent per annum. An investor deposits $1000 on 1 January. How much interest will have been earned by 30 June?
The answer given is $30.38
How did this answer arrive !An annual rent of $2000 is to be received for 10 successive years with the first payment due tomorrow. The relevant rate of interest is 8%. Calculate the present value of this stream of cashflows.
The answer given is $14,494.
Can you please explain me sir how that answer arrived!
H is forecasting its sales for next year using a combination of time series and regression analysis models. An analysis of past sales units has produced the following equation for the quarterly sales trend :
Y = 26x + 8850
Where the value of x represents the quarterly accounting period and the value of y represents the quarterly sales trend in units. Quarter 1 of next year will have a value of x of 25.
The quarterly seasonal variations have been measured using the multiplicative model are :
Quarter 1 -15%
Quarter 2 -5%
Quarter 3 +5%
Quarter 4 +15%Production is planned to occur at a constant rate throughout the year.
The company does not hold inventories at the end of any year.
The difference between the budgeted sales for quarter 1 and quarter 4 next year are what?
The answer given is 2940 units. Could you please explain me how that answer arrived?
H is forecasting its sales for next year using a combination of time series and regression analysis models. An analysis of past sales units has produced the following equation for the quarterly sales trend :
Y = 26x + 8850
Where the value of x represents the quarterly accounting period and the value of y represents the quarterly sales trend in units. Quarter 1 of next year will have a value of x of 25.
The quarterly seasonal variations have been measured using the multiplicative model are :
Quarter 1 -15%
Quarter 2 -5%
Quarter 3 +5%
Quarter 4 +15%Production is planned to occur at a constant rate throughout the year.
The company does not hold inventories at the end of any year.
The difference between the budgeted sales for quarter 1 and quarter 4 next year are what?
The answer given is 2940 units. Could you please explain me how that answer arrived?
If the regression equation (in $000) linking sales(Y) to advertising expenditure (X) is given by Y = 4000 + 12x , what is the forecast sales when $150,000 is spent on advertising,to the nearest $ ?
The answer given is $5,800,000. Could you please explain me how that answer arrived?
In data with a 4 year cycle,the cyclical components using the additive model are given to be :
Year 1 – 10
Year 2 – 15
Year 3 – 25
Year 4 – 220If 2015 is year 1 of the cycle and if the trend for 2019 is predicted to be 70, what is the predicted actual value for 2019?
The answer given is 80. How did that answer arrive?