Please i will need the answers in a couple of hours' time and not in excel format
Question One (10 marks): An investor had GHS500,000 security in maturity with the then Gold Cost Security Fund Management and could not redeem the security before the fund management was closed down. The Government provided an option of paying the locked money in 5 years from now at zero coupon rute (option!). The Consolidated Bank of Ghanu (CBG) provided a second option of buying the GHS500,000 from the investor today at a discount rate consistent with the 20 April 2020 treasury bill rate (91-day rate). a. Use the inflation data presented in Figure 1 to compute the average inflation rate during the period. If the average inflation rate increases by 1.5% each year, based on this and that of the treasury bill rate in Table 1, which of the options would you advice the investor to take? Provide all calculations to back your recommendation (7 marks) igre INFLATION, August 2019 to April 2030 Yer IN D Air 19 20 Ar Figurel: Year on Year inflation rate, Ghana Statistical Service, August 2020 Table 1: Bank of Ghana Bill rates Issue Date 20 April 2020 27 Apr 2020 27 Apr 2020 Security type 91 day 182 day 91 day Discount rate 13.39 13.11 13.55 Interest rate 13.86 14.03 14.03 b. Explain how payback period, NPV, and IRR criteria are used in decision making and provide example in which each is most appropriate as an appraisal tool. (3 marks) Question One (10 marks): An investor had GHS500,000 security in maturity with the then Gold Cost Security Fund Management and could not redeem the security before the fund management was closed down. The Government provided an option of paying the locked money in 5 years from now at zero coupon rute (option!). The Consolidated Bank of Ghanu (CBG) provided a second option of buying the GHS500,000 from the investor today at a discount rate consistent with the 20 April 2020 treasury bill rate (91-day rate). a. Use the inflation data presented in Figure 1 to compute the average inflation rate during the period. If the average inflation rate increases by 1.5% each year, based on this and that of the treasury bill rate in Table 1, which of the options would you advice the investor to take? Provide all calculations to back your recommendation (7 marks) igre INFLATION, August 2019 to April 2030 Yer IN D Air 19 20 Ar Figurel: Year on Year inflation rate, Ghana Statistical Service, August 2020 Table 1: Bank of Ghana Bill rates Issue Date 20 April 2020 27 Apr 2020 27 Apr 2020 Security type 91 day 182 day 91 day Discount rate 13.39 13.11 13.55 Interest rate 13.86 14.03 14.03 b. Explain how payback period, NPV, and IRR criteria are used in decision making and provide example in which each is most appropriate as an appraisal tool. (3 marks) Question One (10 marks): An investor had GHS500,000 security in maturity with the then Gold Cost Security Fund Management and could not redeem the security before the fund management was closed down. The Government provided an option of paying the locked money in 5 years from now at zero coupon rute (option!). The Consolidated Bank of Ghanu (CBG) provided a second option of buying the GHS500,000 from the investor today at a discount rate consistent with the 20 April 2020 treasury bill rate (91-day rate). a. Use the inflation data presented in Figure 1 to compute the average inflation rate during the period. If the average inflation rate increases by 1.5% each year, based on this and that of the treasury bill rate in Table 1, which of the options would you advice the investor to take? Provide all calculations to back your recommendation (7 marks) igre INFLATION, August 2019 to April 2030 Yer IN D Air 19 20 Ar Figurel: Year on Year inflation rate, Ghana Statistical Service, August 2020 Table 1: Bank of Ghana Bill rates Issue Date 20 April 2020 27 Apr 2020 27 Apr 2020 Security type 91 day 182 day 91 day Discount rate 13.39 13.11 13.55 Interest rate 13.86 14.03 14.03 b. Explain how payback period, NPV, and IRR criteria are used in decision making and provide example in which each is most appropriate as an appraisal tool. (3 marks) Question One (10 marks): An investor had GHS500,000 security in maturity with the then Gold Cost Security Fund Management and could not redeem the security before the fund management was closed down. The Government provided an option of paying the locked money in 5 years from now at zero coupon rute (option!). The Consolidated Bank of Ghanu (CBG) provided a second option of buying the GHS500,000 from the investor today at a discount rate consistent with the 20 April 2020 treasury bill rate (91-day rate). a. Use the inflation data presented in Figure 1 to compute the average inflation rate during the period. If the average inflation rate increases by 1.5% each year, based on this and that of the treasury bill rate in Table 1, which of the options would you advice the investor to take? Provide all calculations to back your recommendation (7 marks) igre INFLATION, August 2019 to April 2030 Yer IN D Air 19 20 Ar Figurel: Year on Year inflation rate, Ghana Statistical Service, August 2020 Table 1: Bank of Ghana Bill rates Issue Date 20 April 2020 27 Apr 2020 27 Apr 2020 Security type 91 day 182 day 91 day Discount rate 13.39 13.11 13.55 Interest rate 13.86 14.03 14.03 b. Explain how payback period, NPV, and IRR criteria are used in decision making and provide example in which each is most appropriate as an appraisal tool
