Financial accounting mock test. I need the answers from questions 1 to 4. Please show all the work.

2. FDN is a record label specializing in jazz and modern classical titles based in Munich To date the label has traded successfully on-line but is considering opening a physical retail outlet with bar, caf and recording studios in Berlin. A suitable outlet has been identified. Fit Out costs will be 50,000 - assume these are all incurred on day 1 of the project. The total rental charge, which includes power, light and water supply is fixed at 12,000 per year for the next 5 years. An assistant will be employed at 1,500 per month to ensure that the store can be open for business for 10 hours per day, 7 days per week, for 50 weeks of the year. A dividend will be paid from the outlet to FDN annually of 30,000, commencing at the end of year 2. Based on market research, FDN has estimated that sales receipts for the next 5 years wo d (gbc) 60,000 Year 1 ooo z-y--f2 10 on 70,000 85,000 90,000 coo Year 4 90,000 q g-ooo Required: z odV OOO I coco I OOD 18 o 000 000 { 8cD 000 30000 30 ooo goo COO ooo 10000 30 coo i. iii. ive What is the payback period? What is the total payback over the 5 year period? 7 marks What is the Net Present Value of the project, assuming a cost of capital of 15% per annum? (the relevant discount factors are 0.870, 0.756, 0.658, 0.572, 0.497) 7 marks What are the advantages and disadvantages of the payback period as an investment appraisal technique? 7 marks What assumptions does the Net Present Value investment appraisal technique make about potential investments? 7 marks Ignore taxes Total 28 marks 3. Accountants and Accounting are conventionally divided into financial and management roles. Describe and discuss some of the management accounting activities drawing on your Ehledge of companies operating in the FDLM sector. 14 marks