(5) a) b) Explain why a rational investor prefer to receive Re.1/= today rather than having the same tomorrow. (05 marks) Alpha PLC has decided to make a deposit Rs. 1,000,000/= surplus funds in a bank fixed deposit for a one year period. The bank annual interest rate is 12%. i) What is the value of deposit at the end of the year if the bank compounds interest on quarterly basis? (03 marks) ii) What is the effective rate of interest that Alpha PLC earns for the deposit? (03 marks) (c) You are the financial controller of Beta PLC. On behalf of your organization you are required to negotiate a bank loan of Rs. 1,000,000/= from Alfa Bank. Certain terms of the loan agreement are given below. Loan is to be paid in four (04) equal annual installments. Interest rate is 15% on the outstanding portion of the loan. i) What is the value of the annual installment? (04 marks) ii) Prepare the loan repayment schedule for the period of four years. (05 marks)