3) a) What should be the amount to be invested: i) To receive Rs. 2,00,000 per annum in perpetuity at an interest rate of 8%. ii) In addition to conditions of point (i) above, if a growth rate of 3% is expected every year.

To receive Rs. 4,00,000 per annum in perpetuity at an interest rate of 5%.

(5marks)

b) Calculate the current ratio and Acid Test Ratio with the following information Debtors 500,000 Cash and Bank 200,000 Inventory 400,000 Trade Payables 150,000 Bank OD 50,000

Subject (Corporate finance) ( 5marks)