BBF201: Introduction To Financial Management Assignment, WOU, Malaysia In order to prepare to send his child to a medical school in the future, Encik Ishak wants to accumulate RM1.5 million
University | Wawasan Open University (WOU) |
Subject | BBF201: Introduction To Financial Management |
QUESTION 1
(a) In order to prepare to send his child to a medical school in the future, Encik Ishak wants to accumulate RM1.5 million at the end of 15 years. Assuming that his savings account will pay 4.5% compounded annually, calculate how much he would have to deposit if:
i. he wants to deposit an equal amount at the end of each year.
ii. he wants to deposit one large lump sum today.
(b) Ravindran starts a retirement fund at age 21 and plans on depositing equal annual amounts on each birthday, starting at age 21, and ending at age 60. He wishes to have RM3 million at age 60. Chong Beng starts his fund on his 30th birthday. He wants to deposit equal annual amounts on each birthday starting on his 30th birthday and ending on his 60th birthday. Chong Beng wants to also have RM3 million at the age of 60.
If the investment funds earn 8% per annum, calculate the amounts which Ravindran and Chong Beng respectively will have to save each year to meet their goals. Justify the difference.
(c) Selinna is planning to deposit RM10,000 today into a bank account. Five years from today, she expects to withdraw RM7,500. Calculate how much money will be in the account eight years from now if the account earns 5% compound interest every year.
(d) RM9,000 is invested for 7 years and 3 months. The investment is offered at 12% compounded monthly for the first 4 years and 12% compounded quarterly for the rest of the period. Calculate the future value of this investment.
(e) An investment will pay RM500 in three years, RM700 in five years, and RM1,000 in nine years. Calculate the present value of this investment if the compound interest rate is 6% per year.
Are You Searching Answer of this Question? Request Malaysian Writers to Write a plagiarism Free Copy for You.
QUESTION 2
(a) Salma is considering investing in either one of the jewelry companies – Pearl Berhad or Diamond Berhad. Historical data suggests the following probability distribution for Salma’s returns from these two jewelry companies. Decide which company would give a higher expected return.
(b) The following is historical data for Security ABC and XYZ.
i. Calculate the expected return and standard deviation for the securities ABC and XYZ.
ii. Justify which of the two securities an investor will invest in if the investor is risk averse.
Get Solution of this Assessment. Hire Experts to solve this assignment for you Before Deadline.
QUESTION 3
Aneka Selera Sdn Bhd is considering opening a new restaurant. It would cost RM1 million to open the restaurant (Year 0). The business is expected to last for about 4 years with no salvage value. The restaurant facilities would be depreciated over the 4 years on a straight-line basis.
Net cash inflows from the investment in the restaurant before deducting annual depreciation charges, starting in Year 1, are estimated as follows:
The cost of capital for Aneka Selera Sdn Bhd is 20%.
(a) Calculate the following:
(i) The payback period.
(ii) The accounting rate of return.
(iii) Internal rate of return (IRR)
(b) The supplier advises Aneka Selera Sdn Bhd to open two restaurants simultaneously in order to reduce the initial cost of investment. The total initial investment for two restaurants would be RM1.7 million, with the total annual cash inflows for both restaurants being doubled.
Calculate the new:
(i) Payback period.
(ii) Accounting rate of return.
(iii) Internal rate of return (IRR)
(c) Suggest to the company whether to open one or two restaurants simultaneously. State reasons for your answer.
Stuck in Completing this Assignment and feeling stressed ? Take our Private Writing Services.
Get Help By Expert
If you’re looking for the best homework helper, Assignmenthelper.my is a perfect choice. Our team of experienced professionals will work with you to ensure that your problem is solved quickly and accurately. With us, you can rest assured you’ll be receiving the best assignment assistance available in completing your college or university work. Join us today and get help right away - don’t hesitate any longer!
Recent Solved Questions
- PBD10202: ENGLISH II Essay, IIUM, Malaysia Steph was looking at Instagram there were blessed yoga photos and Sunday Breakfast pictures
- UGB264: Business Ethics, Responsibility, and Sustainability Report, UOS, Malaysia Examine and discuss the key challenges around corporate responsibility, relating directly to the ethical stance
- Medical Law Report, UCISS, Malaysia Penelope, aged 65, has suffered from schizophrenia for most of her adult life. Penelope’s son took her to see a doctor
- BBM104: Principles of Marketing Case Study, UT, Malaysia Once a major tourist attraction, the zoo appears to be back on its feet after the pandemic but is still in need of a revamp
- BBCE1023: Principles Of Macroeconomics Assignment, (TAR UMT), Malaysia
- Supply Chain Management Case Study, UUM, Malaysia Provide the operational definition of the supply chain in the context in which your organization and its supply chain operate
- MPU24021: Portfolio fotografi bermaksud kumpulan karya dalam bentuk foto dari fotografi atau sekumpulan: Photography Assignment, PIS, Malaysia
- Animal Crossing Assignment, UPM, Malaysia New Horizons (ACNH) and how it affects their communicative anxiety when interacting with other players
- ACC7102E: ACCOUNTING AND FINANCE FOR MANAGERS Assignment, UOM, Malaysia You are expected to be resourceful, innovative and creative when communicating and presenting your discussion
- Finance Accounting and Management Report, UON, Malaysia You have been hired as a management consultant to analyze the current financial position of the company