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Subjective question of acc501

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Mid Term Subjective Questions from Past Papers of Business Finance ACC501 Prepared By: Ammar Ahmed (mc080400850) Q No 1 Marks: 5 Cash Flows for a project are given below: Period Cash Flows 1 Rs.8,000 2 Rs.12,000 3 Rs.20,000 4 Rs.35,000 5 Rs.40,000 Compute the Future Value of cash flow stream of project at the end of year 5 with a compound annual interest rate 14%. Q No 2 Marks: 5 Explain the difference between Simple Interest & Compound Interest with the help of example. Q No 3 Marks: 5 A company has total annual sales (25% on cash basis) of Rs.3,000,000 and a gross profit margin of 20 %. Its current assets are Rs. 500,000; current liabilities are Rs. 340,000; inventories are Rs. 260,000; and cash is Rs. 60,000. Calculate: (a) How much average inventory should be carried if management wants the inventory turnover to be 5 times? and (b) How rapidly (in how many days) must accounts receivable be collected if management wants to have an average of Rs.240,000 invested in receivables? (Assume a 365-day year.) Q No 4 Marks: 5 ST manufacturing company is offering the following bonds for issue. Calculate the value of each bond. Bond Par Value (Rs.) Coupon Rate (%) A B C 1,000 500 100 7 12 16 Years to Maturity (Years) 12 15 20 Req. Stated Return (%) 8 10 12 Note : >> In case of Bond A, interest payments are made annually >> In case of Bond B, interest payments are made semi-annually >> In case of Bond C, interest payments are made quarterly Q No 5 Marks: 3 Discuss the signifi ...
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