Question 1: a. Calculate the future value of the following yearly cash flows at the end of the fifth year assuming a 20% return annum. Year Cash Flow (GHC) 1000 2 600 3 400 4 200 5 100 b. Daniel Otu borrowed GHC 20,000.00 from Republic Bank Ltd at the rate of 18% and agreed to pay equal instalments over five years. i. Determine the size of the payments ii. Set up an amortization schedule for the loan. iii. Determine the total interest paid for the entire period c. What is the price of a 6.5 % annual coupon bond, with a GHC1,000.00 face value, which matures in 3 years, if the required rate of return is 3.9% and the coupons are paid semi-annually? d. Ladies Ltd has 1.4 million shares of stock outstanding. The stock currently sells for GHC 40 per share. Ladies Ltd's debts are publicly traded and were recently quoted at 93% of face value. It has a total face value of Gh 10 million and it is currently priced to yield 11%. The risk-free rate is 8% and the market risk premium is 7%. You have estimated Ladies Ltd's beta as 0.74. If the corporate tax is 34%, calculate the weighted average cost of capital? e. Using the following data, which of the two projects will you select and why? Time Project A (GHC) Project B (GHC) 0 (20,000) (20,000) 7,000 1,000 2 7,000 1,000 3 7,000 9,200 4 7,000 20,000 i. Using the NPV method for both Project A and B if the cost of capital is 15%. ii. Using the Payback method for both Project A and B