hi guys

guys i need the answer on Wednesday if thats possible

thanks

AQ004-3-2-FMTS Assignment Page 1 of 2 QUESTION 1 (25 Marks) (a) (b) (c) Carls owes $300 due in 3 months' time and $500 due in 8 months. What single payment (i) now, (ii) in 6 months' time (iii) in one year's time, will liquidate this obligation, if money is worth 8% p.a. and focal date is the time when the payment is made? (9 marks) John borrows $1,000 from Jane and at annual effective rate of interest i. He agrees to pay her back $1,000 after six years and $1,366.87 after another six years. Three years after his first payment, John repays the outstanding balance. What is the amount of John's second payment? (5 marks) A company is considering the possibility of acquiring a new equipment for $40,000. The salvage value is estimated to be $5,000 at the end of 6 years. Maintenance costs will be $400 per month, payable at the end of each month. The company could lease the equipment for $1,200 per month, payable at the end of each month. Under the 6-year lease agreement, the lessor would pay the maintenance costs. If the company could earn interest at 18% p.a. compounded monthly on its capital, advise the company whether to buy or lease. (11 marks) QUESTION 2 (25 Marks) (a) (b) An annuity is payable in arrears for 20 years. The first payment is of the amount $8,000 and the amount of each subsequent payment decreases by $300 each year. Find the present value of the annuity on the basis of an interest rate of 5% per annum. (15 marks) You are planning to retire and buy a condominium at the Cherating seaside. Presently the condominium costs RM200,000 and is expected to increase in value each year at a rate of 7% per annum. Suppose you can earn 12% p.a. on your investments, how much must you invest at the end of each month for the next 10 years to be able to buy your dream condominium when you retire? (10 marks) QUESTION 3 (25 Marks) (a) ` Level 2 A couple purchased a home and signed a mortgage contract for $300,000 to be paid in monthly instalments over 25 years at 6.6% p.a. compounded monthly. The contract stipulates that the mortgage will be renegotiated at the new prevailing rate of interest. Find (i) The monthly payment of the loan. (4 marks) (ii) The total principal paid after 10 years. (6 marks) (iii) The new monthly payment after 10 years at 5.52% p.a. interest compounded monthly. How much can they save on the new instalment every month? Asia Pacific University Technology & Innovation 2017 AQ004-3-2-FMTS (b) Assignment Page 2 of 2 (4 marks) A company has to replace a current production process. The current process is rapidly becoming unreliable whereas demand for the product is growing. The company must choose between alternatives to replace the process. It can buy either a large capacity process now at a cost of $5 million, or a medium capacity process at a cost of $3.2 million and an additional medium capacity process which will cost $2.2 million, to be installed at the end of year 3. The contributions of profit per year from operating the two alternatives are: 1 2.0 Contribution ($ Millions) at year end 2 3 4 2.3 2.8 2.8 5 2.8 6 2.8 Large Process 2 Medium 2.0 2.0 2.0 2.4 2.8 2.8 Processes Use EXCEL to present a discounted cash flow analysis for this problem and determine the Internal Rate of Return (IRR) for each alternative, and then decide between the alternatives. (Using the discount rates of 40% and 60% as the basics for any calculations and correct your answers to 6 decimal places) (11 marks) QUESTION 4 (25 Marks) (a) Suppose you are reviewing a price sheet for a bond and see the following prices (per $100 par value) reported. You observe what seem to be several errors. Without calculating the prices of each bond, indicate which bond seem to be reported incorrectly and explain why? Bond U V W X Y Z (b) Price 90 96 110 105 107 100 Coupon Rate (%) 6 9 8 0 7 6 Required Rate (%) 9 8 6 5 9 6 (14 marks) Waco Industries 5 year, $1,000 par value bonds pay 8% coupons annually. The market price of the bond is $1,035. (i) Compute the bond's yield to maturity (4 marks) (ii) Find the modified duration of the bond and interpret your answer. (7 marks) Level 2 Asia Pacific University Technology & Innovation 2017