1. a. Amin received RM3,456 at the end of Year 2. At the end of the following two years, he received RM19,000 and RM1,250, respectively. What is actually the future value of these cash flows at the end of Year 6 with a given interest rate of 11 percent? (4marks)

1 b) Your brother will give you RM 150 at the end of each month for 10 years while you attend college. At a discount rate of 5 percent, what are these payments worth to you on the day you enter college? (3marks)

1 c) Awira just purchased an annuity that will pay RM67,000 a year for 30 years. If the interest offered is 11%, starting today. What was the purchase price for this annuity? (3marks)

2) What is the standard deviation of the returns on a stock given the following information? (10 marks)

State of	Probability of	Rate of return
Economy	state of economy	if state occurs
boom	0.12	0.18
normal	0.65	0.67
recession	0.23	0.84

3 a) Suppose Amalanda Company has the following portfolio of stocks. Based on the information below, calculate the portfolio weight of stock C. (5 marks)

stock	number of share	price per share (rm)
a	300	11
b	200	45
c	600	21
d	100	47

3 b) Company Lupa Diri Sdn Bhd has the following stocks: If the Capital Asset Pricing Model (CAPM) holds and beta for Stock A is greater than beta for Stock B by 0.84. Calculate the slope of SML. (5 marks)

state of economy	probability of state of economy	rate of return if state occur stock A	rate of return if state occur stock B
boom	0.56	0.589	0.097
normal	0.15	0.158	0.076
recession	0.29	-0.246	0.042

4) The Cheap Store starts with 700 units stocks every week. The stock is used up each week and a reorder is made to replace the used up items. If the yearly carrying cost per unit is RM20 and the fixed order cost is RM80. (Note: there are 52 weeks in a year). (10 marks)

Calculate:

i. Carrying cost

ii. Restocking cost

iii. The economic order quantity

iv. Number of orders per year

v. Do you think that the company's inventory policy is optimal? How can the company achieve the optimal level?

5. Kwang Hee Company has been engaged in the process of forecasting its financing needs over the next quarter and has made the following forecasts of planned cash receipts and disbursements: (20 marks) a) Historical and predicted sales: April RM 80,000 , August RM 130,000 May RM 100,000 , September RM 120,000 June RM 120,000 , October RM 100,000 July RM 130,000 , November RM 110,000 b) The collection of the sales receipt are as follows: i. 50% is collected in the month of sales ii. 35% is collected one month after sales iii. 10% is collected two month after sales iv. 5% is uncollected c) Merchandise is purchased two month before the sales month and is paid 1 month after it was sold. Purchases equal 80% of sales. d) Monthly rent expenses of RM 3,000 e) Wages and salaries for the coming months are estimated as follows: July RM 18,000 , September RM 16,000 , August RM 18,000 f) Utilities for the firm average 2% of sales and are paid in the month of their incurrence. g) RM 1,000 tax payments are to be made in the second month of each quarter. h) A 9% annual interest rate on a RM 400,000 term loan will be paid monthly. i) Beginning cash balance for the budget period is RM 5,000 and its minimum desired balance is RM 10,000.

j) Based on the above information, prepare a monthly cash budget for three month period ended 30th September.