1.Which of the following statements are true? i) Annuity is a series of equal cash flows with limited period. ii) Annuity is a series of unequal cash flows with unlimited period. iii) Perpetuity is a series of unequal cash flows with limited period. iv) Perpetuity is a series of equal cash flows with unlimited period. Select one: a. ii and iii b. i and iv c. i and ii d. iii and iv

2.

Which one of the following best exemplifies systematic risk?

Select one:

a. Sime Darby has agreed to elect new Chief Executive Officer for coming quarter.

b. Malaysia Central Bank, Bank Negara Malaysia reduced overnight rate (OPR) to 1.75%.

c. Excel International cut off their employees salary by 15%.

d. IKEA Incorporation recalled one of its children bunk bed due to safety issue.

3.

Simon deposited RM1,500 in one investment account. The interest rate is 8% compounding quarterly. If Simon keeps the money for the next 5 years, how much would he has saved?

Select one:

a. RM7,665.30

b. RM6,991.44

c. RM2,228.92

d. RM1,598.33

4.

Berjaya Manufacturing wants to buy new industrial machine. The company has short listed the machines and conducted capital budgeting analysis. The result as per below.

Machine	MI 1.0	MI 2.0	MI Advance
Net Present Value (RM)	55,000	42,000	68,000
Payback Period (years)	3.4	3	4.5

If the company has limited budget and only allow to buy one machine, which machine should the company buy? Why?

Select one:

a. MI 2.0 because the net present value is the lowest.

b. MI 2.0 because the company able to recover their initial cost faster.

c. MI Advance because the net present value is the highest.

d. MI 1.0 because the net present value is exceeded RM50,000 and the payback period is within acceptable period less than 4 years.

5.

Berjaya Manufacturing wants to buy new industrial machine. The company has short listed the machines and conducted capital budgeting analysis. The result as per below.

Machine	MI 1.0	MI 2.0	MI Advance
Net Present Value (RM)	55,000	42,000	68,000
Payback Period (years)	3.4	3	4.5

If theres no limitation and budget constraint, which machines should the company buy?

i) MI 1.0

ii) MI 2.0

iii) MI Advance

Select one:

a. All of the above

b. ii and iii

c. i and iii

d. i and ii