Q7: Mr. Abdullah is interested to purchase a BMW car which cost 20,000 OMR. He approached a Bank Muscat for a loan and banker agreed to provide the loan subject to 20% down payment. He pays RO 300 as a monthly installment for 60 months. a) Find out the total amount financed and total finance charge that Abdullah paid at the end of 60 months and total deferred payment? b) What is rate of simple interest Bank Muscat charged on the loan? c) Do you agree with Mr. Abdullah's decision to buy the car by taking a bank loan? Discuss analytically Q8: Oman Cement Company has bought a machinery for RO 85,000 with an estimated useful life of 7 years. Ms. Safia, an Accounting Manager, is responsible to calculate the depreciation and record in the books of accounts. She is confused in selecting the method of depreciation like WDV or Straight line method. She came to know that the expected scrap value at the end of its useful life is RO 15,000. a) Find out the book value of the machine after 7 years using WDV method and Straight line method. b) Critically compare WDV method and straight line method. c) What does it mean if the scrap value of the machine is more? Discuss considering depreciation and useful life. Q9: Sony Electronics LLC, who is a leading TV manufacturing company in Oman. Mr. Yaqoob, who has recently joined as a production supervisor would like to calculate the total cost of producing 2000 TV's in a month. Records show that material cost of producing one TV is RO 54 while labor cost per TV is RO 4 and other manufacturing cost is also RO 8 per unit. The company pays RO 5550 per month as a rent and Mr. Yaqoob found that there are no other expenses. a) Find out the sales revenue by selling 2000 TV's if Sony electronics rate of mark up is 20% on cost. b) What do you mean by economies of scale? Will it be applicable if the company increases the production capacity from 2000 TV to 3000 TV's per month? Discuss analytically Q10: Ms. Rawan a science school teacher is working with Muscat International School She is having one daughter of 05 years old. She desires to invest some amount of money for her daughter's marriage. She believes that her daughter will get married when she reaches 25 years of age and will require amount of 40,000 OMR for the marriage ceremony. a) How much money Ms. Rawan needs to deposit now, if money compounds monthly at 6% interest rate? b) How much money she needs to deposit now if her requirement is 50,000 OMR for the marriage with 10% simple interest. c) Investment in the bank is more profitable than the stock market. Discuss critically Q7: Mr. Abdullah is interested to purchase a BMW car which cost 20,000 OMR. He approached a Bank Muscat for a loan and banker agreed to provide the loan subject to 20% down payment. He pays RO 300 as a monthly installment for 60 months. a) Find out the total amount financed and total finance charge that Abdullah paid at the end of 60 months and total deferred payment? b) What is rate of simple interest Bank Muscat charged on the loan? c) Do you agree with Mr. Abdullah's decision to buy the car by taking a bank loan? Discuss analytically Q8: Oman Cement Company has bought a machinery for RO 85,000 with an estimated useful life of 7 years. Ms. Safia, an Accounting Manager, is responsible to calculate the depreciation and record in the books of accounts. She is confused in selecting the method of depreciation like WDV or Straight line method. She came to know that the expected scrap value at the end of its useful life is RO 15,000. a) Find out the book value of the machine after 7 years using WDV method and Straight line method. b) Critically compare WDV method and straight line method. c) What does it mean if the scrap value of the machine is more? Discuss considering depreciation and useful life. Q9: Sony Electronics LLC, who is a leading TV manufacturing company in Oman. Mr. Yaqoob, who has recently joined as a production supervisor would like to calculate the total cost of producing 2000 TV's in a month. Records show that material cost of producing one TV is RO 54 while labor cost per TV is RO 4 and other manufacturing cost is also RO 8 per unit. The company pays RO 5550 per month as a rent and Mr. Yaqoob found that there are no other expenses. a) Find out the sales revenue by selling 2000 TV's if Sony electronics rate of mark up is 20% on cost. b) What do you mean by economies of scale? Will it be applicable if the company increases the production capacity from 2000 TV to 3000 TV's per month? Discuss analytically Q10: Ms. Rawan a science school teacher is working with Muscat International School She is having one daughter of 05 years old. She desires to invest some amount of money for her daughter's marriage. She believes that her daughter will get married when she reaches 25 years of age and will require amount of 40,000 OMR for the marriage ceremony. a) How much money Ms. Rawan needs to deposit now, if money compounds monthly at 6% interest rate? b) How much money she needs to deposit now if her requirement is 50,000 OMR for the marriage with 10% simple interest. c) Investment in the bank is more profitable than the stock market. Discuss critically
