Question
QUESTION 4 Golden Joy Investment is engaged in mining in a deprived farming community in the Western North Region of Ghana. The company invested heavily
QUESTION 4 Golden Joy Investment is engaged in mining in a deprived farming community in the Western North Region of Ghana. The company invested heavily in their concession and eventually has started recouping their investment. The community, led by their Chiefs and Elders, have written a petition to the company for support for two key infrastructural needs. Imagine you have been employed as financial consultant in an established firm of your choice: (a) How will the mining company be able to determine, and maximise or satisfice stakeholders' expectation? (5 Marks) (b)What will be the objective of each stakeholder identified? (5 Marks) Veroni Ventures a key distributor of Voltic Water and other assorted products is considering investing Ghc335,600 in a project at Kasoa with a five year life. The project will result in an increase in the company's turnover of Ghc350,000 at additional fixed cost of Ghc110,000 and a variable costs ofGHS150,000. At the end of the project in five years time, the assets will be sold for Ghc35,000.The company's required rate of return is 10%. Assuming you are the financial director of such company: (c) How will you determine the Net Present Value of the project of Veronis Ventures? EV(5 Marks) (d)Calculate the sensitivity of the investment decision in (a) to the estimates of i. Variable Costs AP(5 Marks) ii. Discount Rate EV(5 Marks) Total (25 Marks)
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