Question 1 R&B Co. Ltd. is planning to build market stores on a Build-Operate-Transfer (BOT) arrangement for the Sunyani Municipal Assembly. The total cost of the project is estimated at GH 450, 650.00. The estimated monthly net operating income (NOI) for the investment is GHS3, 500.00 with operating period of 15 years after which the stores would be transferred to the Assembly. a. With a detailed numerical analysis, explain the financial justification for this investment given that GoGs one-year Treasury bill rate is 24% p.a. b. Given that inflation will average 12% over the next fifteen years, show (numerically) how the investor may replicate the same project for another assembly at the end of the fifteen years, without using loan, if money can be invested at 24% p.a. c. Analyse the feasibility of your recommended approach in c using the projects NOI. Question 2 The price of a Daewoo Matiz taxi cab is GH20,000. The expected rate of return for such investments is 15% p.a. a. Estimate the annual cash returns (annuities) to the investor if the economic life of the cab is five years b. If the investor reinvests the return of capital into an account which pays 10% interest p.a., ascertain how much would be available for replacing the vehicle at the end of the fifth year. NB: Return of capital is obtainable from amortization schedule. c. Explain the financial feasibility of the decision in b if inflation averages 5% p.a. over the five year period. Question 3 a. Explain the relationship between bond price and market yield. b. What is the difference between the following pair of concepts? i. Accumulation and discount factors at compound interest ii. Nominal and real growth rate