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Instructions: Carefully read the information below and answer questions which are highlighted in bold letters. Attempt all the questions, Company XYZ Ltd. is a financing

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Instructions: Carefully read the information below and answer questions which are highlighted in bold letters. Attempt all the questions, Company XYZ Ltd. is a financing company operating in more than 20 different cities of Pakistan. The major aim of this company is to provide funds to individuals and institutions to promote entrepreneurial activities in the country. The company has adopted different ways to generate funds. Both preferred and common stocks are issued by the company, also different types of bonds are sold by this company to accomplish capital requirements. Furthermore loan from financial institution has also been taken by the company for 50 million Rupees. This company has a policy to offer loan on easy installments and with less interest rate as compared to other financial institutions working in market. Currently the company has offered a plan which requires the borrowers to pay Rs.75, 000 at the end of each year for 10 years. The interest rate charged by the company on this type of lending is 12% compounded annually. You are required to calculate what amount will accumulate after 10 years if company works under this policy? As the company has taken loan from other financial institutions to fulfill its capital requirement. Therefore the company needs to pay its loan amount in equal repayments of Rs. 45000 at the beginning of each year for next 8 years. The annual interest rate charged by the financial institution is 15% You are also required to calculate Present value for these repayments. Suppose this financing company offers two different plan for borrowings to its customers. One is demanding interest rate of 10% compounded semiannually and second is interest rate of 6% compounded quarterly. You want to get loan of Rs. 300,000 today how much it will grow in 8 years at these rates? Which plan is most suitable for customers? Company is also guiding its customers about different forms of business to start entrepreneurial activities and to provide them with general guidelines to establish their business in the market. Because company believes that it's necessary to understand concepts of "Business Types" before investment decision Therefore you are required to provide main features of Corporations and Limited Liability Companies (LLCs) also to differentiate between these two types so that it could be published in the annual newsletter of company as general guidelines for investors

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