Management Accounting and Financial Analysis for CA Final Examination by M Y KHAN, P K JAIN | 9780070611801 | 0070611807 | Holooly

Accounting for Business

Management Accounting and Financial Analysis for CA Final Examination

474 SOLVED PROBLEMS

Question: 3.17

From the undermentioned facts, compute the net present values (NPVs) of the two projects for each of the possible cash flows, using sensitivity analysis. ...

Verified Answer:

The NPV of each project, assuming a 10 per cent re...

Question: 3.14

Sound Limited has a financial resource constraint of a maximum sum of Rs 65 lakh in the current year. It has evaluated a large number of investment projects but has discarded all except those listed below. All the listed investment proposals are independent. The selected list of investments provide ...

Verified Answer:

First, we should arrange the investment projects i...

Question: 3.13 (Indivisible Project)

A company working against a self-imposed capital budgeting constraint of Rs 70 crore is trying to decide which of the following investment proposals should be undertaken by it. All these investment proposals are indivisible as well as independent. The list of investments along with the investment ...

Verified Answer:

NPV from investments D, E and B is Rs 68 crore wit...

Question: 18.10

Assume everything to be the same as contained in Example 18.9, except that the Indian rupee is likely to appreciate by 2 per cent each year in relation to US dollar, for 6 years. Determine the effective cost of preference shares from the point of view of the parent company. ...

Verified Answer:

\qquad \,k_p

= 12% (1 + 0.02) (1 + ...

Question: 11.I.19

The Hypothetical Manufacturers Ltd (HML) enters into a factoring arrangement with the Hypothetical Factors Ltd (HFL). According to the agreement, the HFL would pay, in advance, 80 per cent of the value of factored receivables at 25 per cent interest, compounded quarterly, the balance is ...

Verified Answer:

Question: 11.I.18

The Hypothetical Consumer Finance Ltd (HFCL) has structured the following types of consumer credit schemes to finance some specified assets for Rs 30,000: (A) Zero Deposit Scheme: (1) Repayment period, 36 months, (2) equated monthly instalment, Rs 1,110, (3) bullet instalment/payment at the end of ...

Verified Answer:

(a) (i) Effective rate of interest implicit in the...

Question: 11.I.17 (Flat and Effective Rates of Interest)

The Hypothetical Consumer Finance Ltd (HFCL) has structured a consumer credit deal for Rs 4,00,000 on the following basis: ...

Verified Answer:

Working Notes 1. Total annual charge for credit = ...

Question: 3.PP.29

Assume everything to be the same as contained in P3.28, except that the firm follows written down value method of depreciation at the rate of 25 per cent. Assume further that the company does not have any other asset in the block of 25 per cent and the machine is expected to have salvage ...

Verified Answer:

There will be a change in PV of tax savings due to...

Question: 11.I.20

The Reliable Industries Ltd (RIL) is presently managing its accounts receivables internally, through its sales and credit department. Its credit terms for sales are 2/10, net 30. The past experience of the RIL has been that on an average 30 per cent of the customers avail of the discount, while ...

Verified Answer:

Working Notes Cost of funds invested in receivable...

Question: 9.4

Determine optimal weights, at zero correlation, for the data provided in Example 9.3. Optimal weights are: ...

Verified Answer:

Optimal weights are:

\qquad\,w^*_L = [(20)^...

Loading...