Please see tables, references, and further information for this question. The references could be found on the last page

SCENARIO

You are the Accountant and Budget Officer at KITCHEN CRAZE plc a company listed on the London Stock Exchange in the FTSE 100. The company produces and sells custom made kitchen cupboards. The company was established five years ago by Peter Griffin and his wife Lois Griffin. The couple owns 70% of the equity share capital of the company and the other 30% is owned by mostly individuals all over the globe. The shares are 1 ordinary shares.

The major raw material that goes into making these kitchen cupboards is melamine faced chipboard (MFC). MFC is supplied by one supplier - Chipboard Limited. Kitchen Craze plc operates from freehold factory premises in Park Royal industrial complex, London where a small portion of its production is sold for cash. Most of the company's production is sold to retailers across the UK.

Personnel

Senior and middle management includes the following:

Managing Director: Peter Griffin

Sales Director: Lois Griffin

Accountant/Budget Officer: You

Financial Controller: position vacant

Production Manager: Stewie Griffin

Stewie Griffin is concerned that his parents may be mismanaging the company and has asked you to address the following topics in a business report to him, by 12:59 December 2. He wishes to use the report to allay or confirm his fears, most importantly, as the basis for a discussion he intends to have with his parents regarding the direction of the business.

TASK 1

Data Analytics/Real world

Peter and Lois have decided to expand the business because they are convinced that there will be a house building explosion in the next few years and kitchen sales will skyrocket. Stewie is not convinced and has obtained data from the Office of National Statistics (ONS) that likely correlates with kitchen sales: UK population growth and houses built in the past ten years statistics. Stewie is convinced that this data should have been used in his parents' decision to expand the business, as such, the data should be appropriately collated and presented.

REQUIRED to:

1. Using spreadsheets: "Data-Population" and "Data-Houses Built" in the assignment workbook; create an interactive dashboard on the partially completed "Dashboard" worksheet to include a:
   1. bar chart of population by region over the years using "YEAR" as the slicer;
   2. line graph of houses built over the years using "category" as slicer and;
   3. cluster column chart showing year on year changes in number of houses built. The slicer at (ii) above should work with this.
2. In your report, explain ways in which the directors could have used the data to make the decision to expand a more scientific/empirical approach. Using the data and other pertinent social, economic, technical and political events to critically assess whether the directors are correct in their assertion that kitchen sales will grow in the next few years.

TASK 2

Investment Appraisal

Peter and Lois are considering investing in a new cutting and assembly machine in anticipation of the increased demand for kitchen units. If they were to buy the machine now it would cost 12,000,000 with a useful life of 4 years. The machine is a specialised machine with very little alternate use, hence the scrap value is estimated to be just 1,000,000 which will be received at the end of year 4.

You and Stewie both agreed that the following data may be used to appraise the project.

Sales revenue and variable costs for the kitchen units in each of the four years are expected to be as follows:

YEAR	1	2	3	4
Production/Sales(units)	20,000	26,000	30,000	31,500
Sales ()	6,000,000	7,800,000	9,000,000	9,450,000
Variable cost ()	3,000,000	3,900,000	4,500,000	4,725,000

Fixed cost is estimated to be 500,000 per year and Stewie believes that 12% should be used to appraise the project. The company is subjected to a corporation tax rate of 20% and taxes are paid/received a year in arrears. The company is eligible to claim tax allowable depreciation on the asset at 25% reducing balance.

REQUIRED to:

1. Using the worksheets "InvAppraisal" and "PV Table"; calculate the net present value and payback period of the project.
2. If inflation rate was 5%, explain how would this affect your calculations.
3. In your report, assess whether the directors should go ahead with the project.

TASK 3

Cost of Capital/Capital Structure

The financial statements for the year just ended - September 30, 2021 are given on worksheets: "Income Statement" and "SoFP". The following noteworthy events occurred in the financial year just ended:

• Peter and Lois being so enthused about the prospects of the building sector expected boom, have invested 1,000,000 in Barratt Development, one of the major house building companies in the UK.
• The current market price of the ordinary shares is 3.60 and the company has proposed to pay a dividend of 0.20 per share. The dividend 5 years ago was 0.15. The share price is expected to grow at the same rate of the dividend.
• The loan notes are convertible in six years' time into 25 ordinary shares. If they are not converted, they will be redeemed at par. The loan notes are currently trading at 106.
• The current ex-div price of the preference share is 2.00
• The company pays corporation tax at 20%.

REQUIRED to:

1. In the "SoFP" worksheet, to the right of the statement of financial position, calculate:
   1. Operating gearing
   2. Financial gearing
   3. The company's cost of equity K_e , cost of preference share debt K_p and, cost of convertible loan note K_d;
2. The market values of the company's equity capital, preference share and convertible loan note;
3. The company's weighted average cost of capital

In your report

1. Explain the difference between the proposed investment asset in task 2 and the investment asset in Barratt Development.
2. Explain why the 12% rate used to appraise the project in task 2 may not be appropriate.
3. Use the results of your calculations along with any other pertinent information, traditional and Modigliani and Miller theories of gearing to critically assess the effectiveness of management (directors) in managing the company's capital structure in order to maximise shareholders' wealth.

TASK 4

The Budget Process

The latest set of financial statements of Kitchen Craze plc are set out in worksheets: "Income Statement" and "SoFP" in the assignment workbook. Refer to these financial statements and the information provided on pages 6 and 7 of this booklet and use this information to complete this task.

REQUIRED to:

1. Using the worksheet named "FunctionalBudgets" (the purple tab) in the assignment workbook, PREPARE the:
   1. sales budget monetary terms from the already completed sales budget in units;
   2. credit sales receipts forecast;
   3. material purchases and labour cost budgets using the already completed production budget in the worksheet and;
   4. payments to credit supplier forecast.
2. In the worksheet named "Cash Budget", prepare the cash budget from your completed functional budgets, the forecast sales receipts, forecast credit supplier payments, the financial statements and the other information on pages 6 and 7 in this booklet. In your report, comment on the cashflow statement under the heading "The Budget Process".
3. Assuming the company absorbed fixed overheads on the basis of budgeted labour hours; you are to use the full absorption cost to determine the selling price of a cupboard unit if management wishes to make 20% mark-up. Comment on your answer.
4. Zero-Based Budgeting (ZBB) and Incremental Budgeting are traditional approaches to budgeting. It is argued by some observers that these approaches to budgeting are incapable of meeting demands of commercial entities in the information age. These observers argue that Beyond Budgeting approach should be adopted instead.

In your report, critically assess the relative strengths of this assertion.

PRODUCTION Information

1. A cupboard unit is called a cabinet. Each cabinet uses 5 metres of material (processed MFC). The cost of a metre of MFC is expected to remain at 19 per metre for the next six months.
2. Other direct material nuts, crews, hinges and glue are expected cost 5 per cabinet for the next six months.
3. A cabinet takes 2 hours to make and direct labour rate is 25 per hour which will remain in force for the next six months. Labour is paid in the month it is incurred.
4. The inventory figure of 30,000 in the Statement of Financial Position (SoFP) for the year just ended, September 30, 2021, represents only finished cabinets; 200 cabinets valued at marginal cost of 150 each.
5. KITCHEN Craze operates a just-in-time inventory system for both raw material and finished goods, therefore, it is expected that little or no material, work-in-progress or finished cabinet inventory will be held for the next six (6) months.
6. Fixed production overhead is 74,000 per month and includes depreciation of 32,000: Building - 7,000 and plant and machinery 25,000.

SALES Information

1. Sales are expected to be 1,000 cabinets in October and to then increase by 250 cabinets for each of the following four (4) months to February and then increase by 500 in March.
2. Ten percent (10%) of the total monthly sales will be made from factory shop for cash. The takings from these are expected to be banked daily.
3. Cabinets will be sold to the retail trade at a price of 300 until 31 October; the company will then implement a price increase of 5%. Sales made from the factory shop will be made at a price of 295. This price will not increase for the next six months.

4. Sales department costs are expected to be fixed and amount to 30,000 per month.

GENERAL Information

1. It is the company policy for all trade customers to pay within 30 days, however, in practice this do not hold. Hence, for budget, you are to assume that 20% of retail trade customers pay one month after the date of sale and 80% pay two months after the date of sale.
2. You should assume that Trade receivables at 30 September 2021 will be collected as follows:

In October 2,000,000

In November 2,500,000

In December 1,393,000

5,893,000

3. All purchases of MFC, raw material will be paid for one month in arrears. All other costs will be paid in the month in which they are incurred.

4. Trade Payables 600,000 on the SoFP are expected to be paid 300,000 in October and another 300,000 in November.

1. Administration overheads should be budgeted to be 37,000 each month.

6. The investment on the SoFP represents shares in Barratt Development which is expected to grow by 3% before it is sold and credited to the current account in November.

7. The directors have declared half-yearly dividend of 0.20 per share which is expected to be paid in March.

Task 1

Table 1.1: Data-Population

Population estimates for Government Office Regions (GOR), by single year of and sex, 2010 to mid-2020
Year	Regions	All Persons	All Males	All Females
2010	North East	2,586,868	1,263,696	1,323,172
2010	North West	7,019,921	3,446,551	3,573,370
2010	Yorkshire and The Humber	5,254,788	2,582,634	2,672,154
2010	East Midlands	4,507,071	2,221,698	2,285,373
2010	West Midlands	5,565,866	2,743,229	2,822,637
2010	East	5,807,402	2,855,503	2,951,899
2010	London	8,061,495	3,975,939	4,085,556
2010	South East	8,577,771	4,210,659	4,367,112
2010	South West	5,261,270	2,577,335	2,683,935
2011	North East	2,596,441	1,269,598	1,326,843
2011	North West	7,055,961	3,467,727	3,588,234
2011	Yorkshire and The Humber	5,288,212	2,601,969	2,686,243
2011	East Midlands	4,537,448	2,236,979	2,300,469
2011	West Midlands	5,608,667	2,767,260	2,841,407
2011	East	5,862,418	2,885,001	2,977,417
2011	London	8,204,407	4,053,962	4,150,445
2011	South East	8,652,784	4,251,422	4,401,362
2011	South West	5,300,831	2,599,244	2,701,587
2012	North East	2,602,387	1,273,228	1,329,159
2012	North West	7,084,470	3,483,782	3,600,688
2012	Yorkshire and The Humber	5,316,897	2,618,110	2,698,787
2012	East Midlands	4,567,798	2,251,991	2,315,807
2012	West Midlands	5,642,763	2,786,076	2,856,687
2012	East	5,905,914	2,905,789	3,000,125
2012	London	8,308,833	4,106,055	4,202,778
2012	South East	8,724,928	4,288,336	4,436,592
2012	South West	5,339,739	2,620,081	2,719,658
2013	North East	2,610,563	1,278,374	1,332,189
2013	North West	7,103,488	3,495,012	3,608,476
2013	Yorkshire and The Humber	5,337,940	2,630,036	2,707,904
2013	East Midlands	4,598,548	2,267,917	2,330,631
2013	West Midlands	5,675,030	2,803,779	2,871,251
2013	East	5,951,934	2,928,639	3,023,295
2013	London	8,417,458	4,165,752	4,251,706
2013	South East	8,793,154	4,323,843	4,469,311
2013	South West	5,377,702	2,640,617	2,737,085
2014	North East	2,618,736	1,283,116	1,335,620
2014	North West	7,133,026	3,511,220	3,621,806
2014	Yorkshire and The Humber	5,360,117	2,641,368	2,718,749
2014	East Midlands	4,637,369	2,288,061	2,349,308
2014	West Midlands	5,713,439	2,824,444	2,888,995
2014	East	6,017,250	2,962,149	3,055,101
2014	London	8,539,398	4,234,346	4,305,052
2014	South East	8,874,005	4,364,820	4,509,185
2014	South West	5,423,278	2,663,672	2,759,606
2015	North East	2,624,579	1,287,124	1,337,455
2015	North West	7,175,178	3,535,054	3,640,124
2015	Yorkshire and The Humber	5,390,211	2,658,196	2,732,015
2015	East Midlands	4,677,425	2,309,324	2,368,101
2015	West Midlands	5,755,032	2,846,808	2,908,224
2015	East	6,075,970	2,993,400	3,082,570
2015	London	8,666,930	4,305,606	4,361,324
2015	South East	8,949,392	4,405,125	4,544,267
2015	South West	5,471,610	2,688,649	2,782,961
2016	North East	2,636,589	1,293,982	1,342,607
2016	North West	7,223,961	3,563,196	3,660,765
2016	Yorkshire and The Humber	5,425,370	2,678,166	2,747,204
2016	East Midlands	4,725,390	2,335,322	2,390,068
2016	West Midlands	5,810,773	2,878,130	2,932,643
2016	East	6,129,005	3,021,335	3,107,670
2016	London	8,769,659	4,369,201	4,400,458
2016	South East	9,030,347	4,449,245	4,581,102
2016	South West	5,516,973	2,712,343	2,804,630
2017	North East	2,644,727	1,297,924	1,346,803
2017	North West	7,258,627	3,581,219	3,677,408
2017	Yorkshire and The Humber	5,450,130	2,690,510	2,759,620
2017	East Midlands	4,771,666	2,359,406	2,412,260
2017	West Midlands	5,860,706	2,904,272	2,956,434
2017	East	6,168,432	3,040,283	3,128,149
2017	London	8,825,001	4,398,848	4,426,153
2017	South East	9,080,825	4,474,409	4,606,416
2017	South West	5,559,316	2,734,182	2,825,134
2018	North East	2,657,909	1,305,486	1,352,423
2018	North West	7,292,093	3,598,698	3,693,395
2018	Yorkshire and The Humber	5,479,615	2,704,526	2,775,089
2018	East Midlands	4,804,149	2,375,362	2,428,787
2018	West Midlands	5,900,757	2,924,175	2,976,582
2018	East	6,201,214	3,055,520	3,145,694
2018	London	8,908,081	4,448,930	4,459,151
2018	South East	9,133,625	4,500,331	4,633,294
2018	South West	5,599,735	2,754,914	2,844,821
2019	North East	2,669,941	1,312,124	1,357,817
2019	North West	7,341,196	3,625,650	3,715,546
2019	Yorkshire and The Humber	5,502,967	2,717,432	2,785,535
2019	East Midlands	4,835,928	2,391,957	2,443,971
2019	West Midlands	5,934,037	2,941,291	2,992,746
2019	East	6,236,072	3,072,499	3,163,573
2019	London	8,961,989	4,475,817	4,486,172
2019	South East	9,180,135	4,523,939	4,656,196
2019	South West	5,624,696	2,767,122	2,857,574
2020	North East	2,680,763	1,317,749	1,363,014
2020	North West	7,367,456	3,640,348	3,727,108
2020	Yorkshire and The Humber	5,526,350	2,728,685	2,797,665
2020	East Midlands	4,865,583	2,407,678	2,457,905
2020	West Midlands	5,961,929	2,956,945	3,004,984
2020	East	6,269,161	3,089,445	3,179,716
2020	London	9,002,488	4,514,378	4,488,110
2020	South East	9,217,265	4,542,648	4,674,617
2020	South West	5,659,143	2,784,942	2,874,201

Task 1

Table 1.2: -Data-Housing Built

Source: Office of National Statistics (ONS)
HOUSE BUILDINGS COMPLETED IN ENGLAND 2010-2020
YEAR	CATEGORY	Completed Houses
2010	Private Enterprise	83,280
2010	Housing Association	22,660
2010	Local Authorities	790
2010	All Dwellings	106,730
2011	Private Enterprise	85,890
2011	Housing Association	25,950
2011	Local Authorities	2,230
2011	All Dwellings	114,030
2012	Private Enterprise	88,750
2012	Housing Association	25,440
2012	Local Authorities	1,410
2012	All Dwellings	115,590
2013	Private Enterprise	87,010
2013	Housing Association	21,600
2013	Local Authorities	840
2013	All Dwellings	109,450
2014	Private Enterprise	92,850
2014	Housing Association	23,790
2014	Local Authorities	1,180
2014	All Dwellings	117,820
2015	Private Enterprise	110,700
2015	Housing Association	30,130
2015	Local Authorities	1,660
2015	All Dwellings	142,480
2016	Private Enterprise	115,350
2016	Housing Association	24,430
2016	Local Authorities	2,110
2016	All Dwellings	141,880
2017	Private Enterprise	133,460
2017	Housing Association	27,290
2017	Local Authorities	1,750
2017	All Dwellings	162,470
2018	Private Enterprise	135,190
2018	Housing Association	27,550
2018	Local Authorities	2,680
2018	All Dwellings	165,420
2019	Private Enterprise	144,080
2019	Housing Association	32,040
2019	Local Authorities	2,190
2019	All Dwellings	178,300
2020	Private Enterprise	114,542
2020	Housing Association	27,248
2020	Local Authorities	1,040
2020	All Dwellings	142,830

Task 3- Table 3.1 Income statement

KITCHEN CRAZE plc
Income Statement for the year ended September 30, 2021
	2021 000		2020 000
Revenue	35,562		55,821
Cost of Sales	28,354		35,752
Gross Profit	7,208		20,069
Distribution Costs	1,890		5,017
Administrative Expenses	2,532		6,020
Profit from Operations	2,786		9,032
Finance Costs	160		8
Profit before tax	2,626		9,024
Corporation Tax	864		2,888
Profit for the year	1,762		6,136
Other comprehensive income for the year
Revaluation Gain	1,360		0
Total comprehensive income for the year	3,122		6,136

Task 3

Table 3.1: SoFT (Statement of Financial Position)

KITCHEN CRAZE plc
Statement of Financial Position as at September 30, 2021
ASSETS	2021 000		2020 000
Non Current Assets
Investment	1,000		0
Property, Plant and Equipment	5,500		4,800
	6,500		4,800
Current Assets
Inventory	30		930
Trade and other Receivables	5,893		3,740
Cash and cash equivalents	3,037		1,000
	8,960		5,670
Total Assets	15,460		10,470
EQUITY & LIABILITIES
EQUITY
Share Capital (1 Ordinary Shares)	1,000		1,000
Revaluation Reserve	1,360		0
Retained Earnings	8,200		8,195
Total Equity	10,560		9,195
Non Current Liabilities
8% Preference Shares, par value 1	1,000		100
6% Convertible Loan note 2027	3,000		0
	4,000		100
Current Liabilities
Trade and other payables	600		725
Taxes payable	300		450
	900		1,175
Total Liabilities	4,900		1,275
Total liabilities & equity	15,460		10,470

Task 4:

Table 4.1: Functional Budget

	Sales Budget (Units)
	OCT	NOV	DEC	JAN	FEB	MAR		Total
Cabinets	1,000	1,250	1,500	1,750	2,000	2,500		10,000
	Sales Budget ()
Factory Sales
Retail Sales
								0
	Credit Sales Receipts Forecast ()
Credit Sales:
Prior year Rec'bles
1 month - 20%
2 months - 80%
								0
	Production Budget (Units)
Sales	1,000	1,250	1,500	1,750	2,000	2,500
Opening Inventory	200
Closing Inventory	0
Production	800	1,250	1,500	1,750	2,000	2,500		9,800	units
	Materials (MFC) Purchases Budget (KG) and ()
Production									kg
5 metres at 19/m
Purchases								0
	Material Purchases () - nuts, screws
Purchases/Pmt								0
	Payment to Credit Suppliers Forecast
Prior Period
1 month 100%
								0
	Labour Budget hours and
Production hours								0	hours
2hours at 25/hr
								0

Table 4.1Functional Budget Continues

Factory	Retail

Task 4

Table 4.2: Cash-Budget

KITCHEN CRAZE plc
CASH BUDGET for six months to March 31, 2022
	OCT	NOV	DEC	JAN	FEB	MAR	TOTAL
RECEIPTS
Factory Sales
Trade Receivable Receipts
Disposal of Investment
TOTAL RECEIPTS
PAYMENTS
Payment to credit suppliers
Material purchases - nuts, bolts
Production Labour
Fixed production overheads
Sales Department costs
Administration overheads
Dividends
TOTAL PAYMENTS
CASH FLOW
CASH at START	3,037,000						3,037,000
CASH at END

Task 2:

Table 2.1: InvAppraisal

Cashflows/YEAR

0

1

2

3

4

5

YEAR

DETAILS

Tax savings at 20%

Timing of the receipts

0

Cost

TAD 25%

TWV

1

TAD 25%

TWV

2

TAD 25%

TWV

3

TAD 25%

Net CF

TWV

DF@12%

4

Disposal

Present Value

NPV

BA

5

Key

Payback

YEAR

Net CF

Accum CF

TAD - tax allowable depreciation

0

TWV - tax written-down value

1

BA - Balacing Allowance

2

3

4

Task 2

Table 2.2: PV table 1

PRESENT VALUE of 1
Periods (n)	Interest rates (r)
1%	2%	3%	4%	5%	6%	7%	8%	9%	10%
1	0.990	0.980	0.971	0.962	0.952	0.943	0.935	0.926	0.917	0.909
2	0.980	0.961	0.943	0.925	0.907	0.890	0.873	0.857	0.842	0.826
3	0.971	0.942	0.915	0.889	0.864	0.840	0.816	0.794	0.772	0.751
4	0.961	0.924	0.888	0.855	0.823	0.792	0.763	0.735	0.708	0.683
5	0.951	0.906	0.863	0.822	0.784	0.747	0.713	0.681	0.650	0.621
6	0.942	0.888	0.837	0.790	0.746	0705	0.666	0.630	0.596	0.564
7	0.933	0.871	0.813	0.760	0.711	0.665	0.623	0.583	0.547	0.513
8	0.923	0.853	0.789	0.731	0.677	0.627	0.582	0.540	0.502	0.467
9	0.914	0.837	0.766	0.703	0.645	0.592	0.544	0.500	0.460	0.424
10	0.905	0.820	0.744	0.676	0.614	0.558	0.508	0.463	0.422	0.386
11	0.896	0.804	0.722	0.650	0.585	0.527	0.475	0.429	0.388	0.350
12	0.887	0.788	0.701	0.625	0.557	0.497	0.444	0.397	0.356	0.319
13	0.879	0.773	0.681	0.601	0.530	0.469	0.415	0.368	0.326	0.290
14	0.870	0.758	0.661	0.577	0.505	0.442	0.388	0.340	0.299	0.263
15	0.861	0.743	0.642	0.555	0.481	0.417	0.362	0.315	0.275	0.239
16	0.853	0.728	0.623	0.534	0.458	0.394	0.339	0.292	0.252	0.218
17	0.844	0.714	0.605	0.513	0.436	0.371	0.317	0.270	0.231	0.198
18	0.836	0.700	0.587	0.494	0.416	0.350	0.296	0.250	0.212	0.180
19	0.828	0.686	0.570	0.475	0.396	0.331	0.277	0.232	0.194	0.164
20	0.820	0.673	0.554	0.456	0.377	0.312	0.258	0.215	0.178	0.149
Periods	Interest rates (r)
(n)	11%	12%	13%	14%	15%	16%	17%	18%	19%	20%
1	0.901	0.893	0.885	0.877	0.87	0.862	0.855	0.847	0.84	0.833
2	0.812	0.797	0.783	0.769	0.756	0.743	0.731	0.718	0.706	0.694
3	0.731	0.712	0.693	0.675	0.658	0.641	0.624	0.609	0.593	0.579
4	0.659	0.636	0.613	0.592	0.572	0.552	0.534	0.516	0.499	0.482
5	0.593	0.567	0.543	0.519	0.497	0.476	0.456	0.437	0.419	0.402
6	0.535	0.507	0.48	0.456	0.432	0.41	0.39	0.37	0.352	0.335
7	0.482	0.452	0.425	0.4	0.376	0.354	0.333	0.314	0.296	0.279
8	0.434	0.404	0.376	0.351	0.327	0.305	0.285	0.266	0.249	0.233
9	0.391	0.361	0.333	0.308	0.284	0.263	0.243	0.225	0.209	0.194
10	0.352	0.322	0.295	0.27	0.247	0.227	0.208	0.191	0.176	0.162
11	0.317	0.287	0.261	0.237	0.215	0.195	0.178	0.162	0.148	0.135
12	0.286	0.257	0.231	0.208	0.187	0.168	0.152	0.137	0.124	0.112
13	0.258	0.229	0.204	0.182	0.163	0.145	0.13	0.116	0.104	0.093
14	0.232	0.205	0.181	0.16	0.141	0.125	0.111	0.099	0.088	0.078
15	0.209	0.183	0.16	0.14	0.123	0.108	0.095	0.084	0.079	0.065
16	0.188	0.163	0.141	0.123	0.107	0.093	0.081	0.071	0.062	0.054
17	0.17	0.146	0.125	0.108	0.093	0.08	0.069	0.06	0.052	0.045
18	0.153	0.13	0.111	0.095	0.081	0.069	0.059	0.051	0.044	0.038
19	0.138	0.116	0.098	0.083	0.07	0.06	0.051	0.043	0.037	0.031
20	0.124	0.104	0.087	0.073	0.061	0.051	0.043	0.037	0.031	0.026

Task 2

Table 2.2: PV table 2

PRESENT VALUE of an ANNUITY
Periods (n)	Interest rates (r)
1%	2%	3%	4%	5%	6%	7%	8%	9%	10%
1	0.990	0.980	0.971	0.962	0.952	0.943	0.935	0.926	0.917	0.909
2	1.970	1.942	1.913	1.886	1.859	1.833	1.808	1.783	1.759	1.736
3	2.941	2.884	2.829	2.775	2.723	2.673	2.624	2.577	2.531	2.487
4	3.902	3.808	3.717	3.630	3.546	3.465	3.387	3.312	3.240	3.170
5	4.853	4.713	4.580	4.452	4.329	4.212	4.100	3.993	3.890	3.791
6	5.795	5.601	5.417	5.242	5.076	4.917	4.767	4.623	4.486	4.355
7	6.728	6.472	6.230	6.002	5.786	5.582	5.389	5.206	5.033	4.868
8	7.652	7.325	7.020	6.733	6.463	6.210	5.971	5.747	5.535	5.335
9	8.566	8.162	7.786	7.435	7.108	6.802	6.515	6.247	5.995	5.759
10	9.471	8.983	8.530	8.111	7.722	7.360	7.024	6.710	6.418	6.145
11	10.368	9.787	9.253	8.760	8.306	7.887	7.499	7.139	6.805	6.495
12	11.255	10.575	9.954	9.385	8.863	8.384	7.943	7.536	7.161	6.814
13	12.134	11.348	10.635	9.986	9.394	8.853	8.358	7.904	7.487	7.103
14	13.004	12.106	11.296	10.563	9.899	9.295	8.745	8.244	7.786	7.367
15	13.865	12.849	11.938	11.118	10.380	9.712	9.108	8.559	8.061	7.606
16	14.718	13.578	12.561	11.652	10.838	10.106	9.447	8.851	8.313	7.824
17	15.562	14.292	13.166	12.166	11.274	10.477	9.763	9.122	8.544	8.022
18	16.398	14.992	13.754	12.659	11.690	10.828	10.059	9.372	8.756	8.201
19	17.226	15.679	14.324	13.134	12.085	11.158	10.336	9.604	8.950	8.365
20	18.046	16.351	14.878	13.590	12.462	11.470	10.594	9.818	9.129	8.514
Periods (n)	Interest rates (r)
11%	12%	13%	14%	15%	16%	17%	18%	19%	20%
1	0.901	0.893	0.885	0.877	0.870	0.862	0.855	0.847	0.840	0.833
2	1.713	1.690	1.668	1.647	1.626	1.605	1.585	1.566	1.547	1.528
3	2.444	2.402	2.361	2.322	2.283	2.246	2.210	2.174	2.140	2.106
4	3.102	3.037	2.974	2.914	2.855	2.798	2.743	2.690	2.639	2.589
5	3.696	3.605	3.517	3.433	3.352	3.274	3.199	3.127	3.058	2.991
6	4.231	4.111	3.998	3.889	3.784	3.685	3.589	3.498	3.410	3.326
7	4.712	4.564	4.423	4.288	4.160	4.039	3.922	3.812	3.706	3.605
8	5.146	4.968	4.799	4.639	4.487	4.344	4.207	4.078	3.954	3.837
9	5.537	5.328	5.132	4.946	4.772	4.607	4.451	4.303	4.163	4.031
10	5.889	5.650	5.426	5.216	5.019	4.833	4.659	4.494	4.339	4.192
11	6.207	5.938	5.687	5.453	5.234	5.029	4.836	4.656	4.486	4.327
12	6.492	6.194	5.918	5.660	5.421	5.197	4.988	7.793	4.611	4.439
13	6.750	6.424	6.122	5.842	5.583	5.342	5.118	4.910	4.715	4.533
14	6.982	6.628	6.302	6.002	5.724	5.468	5.229	5.008	4.802	4.611
15	7.191	6.811	6.462	6.142	5.847	5.575	5.324	5.092	4.876	4.675
16	7.379	6.974	6.604	6.265	5.954	5.668	5.405	5.162	4.938	4.730
17	7.549	7.120	6.729	6.373	6.047	5.749	5.475	5.222	4.990	4.775
18	7.702	7.250	6.840	6.467	6.128	5.818	5.534	5.273	5.033	4.812
19	7.839	7.366	6.938	6.550	6.198	5.877	5.584	5.316	5.070	4.843
20	7.963	7.469	7.025	6.623	6.259	5.929	5.628	5.353	5.101	4.870

Rerences:

Main References

Arnold, G.A. Lewis D (2019) Corporate Financial ManagementSixth edition Pearson Publishers

Wood, F,(2018) Business Accounting Volume 1, 14 edition ,Pearson Publishers

Other References

Atrill, P. and McLaney, E., (2018) Management Accounting for Decision Makers Pearson.

Drury, C. (2013) Management & Cost Accounting, Low-priced edition, Cengage Learning.

Horngren, C.T., Srikant, M. and Foster, G. (2011) Cost Accounting: a managerial emphasis,Prentice Hall.

Schoenebeck, P and Holtzman, M. (2012) Interpreting and Analyzing Financial Statements, Pearson.