| -0.53% Q7 Matthew saves $12,000 at the end of each month for the next 25 years, after which he retires. During the first five years of retirement, he withdraws $60000 at the start of each month, after which he dies. His son, Sean, inherits the remainder of Matthew's savings. It is further stipulated in Matthew's will that Sean will be paid the money in equal payments, at the start of every month, for the next 20 years. Given a fixed interest rate of 9% p.a., calculate the monthly payment that Sean will receive. | $129,781 | | $184,034 | | $204,444 | | $188,656 | | $173,258 | | $147,389 Q9Syed Alis Smokes can invest $5 million in a new plant for producing odour free tobacco. The plant has an expected life of 5 years, and expected sales are 6 million packs of cigarettes a year. Fixed costs (excluding depreciation expense)are $2 million a year, and variable costs are $1 per pack. The product will be priced at $2.5 per pack. The plant will be depreciated straight-line over 5 years to a salvage value of zero. The real opportunity cost of capital is 10 percent and the tax rate is 40 percent. What is the project NPV? | 5.61million | | 7.89million | | 12.44million | | 6.07million | | 11.88million Q11 Changes in accounts receivable should: | always be included when analysing a proposed investment | | sometimes be included when analysing a proposed investment | | never be included when analysing a proposed investment | | none of the given answers Q12 Calculate the NPV if the outflow is $100 000 and the inflows are $40 000 for the next three years. Assuming the appropriate discount rate to be 12%, what is the NPV? | -$8 671 | | -$3 927 | | -$8 771 | | -$4 078 | Q13 CSC is a mining firm based in Western Australia. One of its core activities is to develop mine fields. Currently, it is considering a project to develop a mine field in the Gibson Desert. The success of this project is largely dependent on the economy of China, where most of CSCs ores are exported to. According to market research that CSC paid $200,000 for, the project will require an investment of $2,000,000 for extraction rights and the necessary equipment. It also shows that the project has 60% of succeeding, in which case CSC will get an annual net cash flow of $850,000 for ten years. If the project fails, CSC will get only $25,000 in the first two years and nothing after that because of the closure of the mine. CSC requires a 9 percent real return on projects of this type. What is the NPV of the project? All cash flows are expressed in real terms. | 1290597 | | 1147614 | | 1829061 | | 1734002 Q14 dentify the forms of market efficiency that allows an investor to profit from insider information? 1) weak form efficiency 2) semi-strong form efficiency 3) strong form efficiency | only 1 and 3 | | only 2 and 3 | | only 1 and 2 | | all of the given answers | Q15A share has returns of 2 percent, 20 percent, -25 percent, and 16 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year? | -8.9 to 12.3 percent | | -17.1 to 23.6 percent | | -25.9 to 36.0 percent | | -37.5 to 44.0 percent | | -57.8 to 64.3 percent | Q16 | A project's residual value is the: |
| disposal value of the project's assets less any dismantling and removal costs associated with the project's termination. | | disposal value of the project's assets less the initial outlay. | | disposal value of the project's assets less the project's working capital. | | disposal value of the project's assets. Q17 Miller Mfg. is analysing a proposed project. The company expects to sell 12,000 units, give or take 3 percent. The expected variable cost per unit is $6.00 and the expected fixed cost is $32,000. The fixed and variable cost estimates are considered accurate within a plus or minus 6 percent range. The depreciation expense is $27,000. The tax rate is 34 percent. The sale price is estimated at $13.00 a unit, give or take 3 percent. What is the earnings before interest and taxes under the base case scenario? | $23,000 | | $25,000 | | $36,830 | | $50,000 | | $57,000 Q18 | Project K has a cost of $52 125 and its expected net cash flows are $12 000 p.a. for eight years. If the required rate of return is 12% p.a., what is the net present value? |
| $38 307 | | $7 486 | | ($7 486) | | ($38 307) | | $6 685 Q20 The primary goal of financial management is to: | A. | | | B. | | | C. | | maximise the value of shares |
| | D. | | | | | | | | | |
