The information below relates to Mr. Boateng who is the M.D. of Firstline Global Consult PRUC, a private unlimited liability company based in Accra.

MONTHLY INCOME TAX RATES APPLICABLE TO RESIDENT INDIVIDUALS

CHARGEABLE INCOME GH RATE % TAX GH CUMTIVE

First 319 Free Nil 319.00 Nil

Next 100 5 5.00 419.00 5.00

Next 120 10 12.00 539.00 17.00

Next 3,000 17.5 525.00 3,539.00 542.00

Next 16,461 25 4,115.25 20,000.00 4,657.25

Exceeding 20,000 @ 30%

Calculate the Tax payable by Mr. Boateng the M.D. of Firstline Global Consult PRUC for the month of April 2020 if he earns an annual salary of 57,600.

(6 marks)

Q4. A payment of GH3,600 is to be made every year for seven years, the first payment occurring in one years time. The interest rate is 8%. What is the PV of the annuity.

(4 marks)

Q5. A firm wants to select the less risky of two alternative assetsX and Y. The expected return and standard deviation for each of these assets returns are

Statistics Asset X Asset Y

(1) Expected return 12% 20%

(2) Standard deviation 9% 10%

Calculate the Coefficient of Variation and interpret your results (4 marks)

Q6.

The table below gives information extracted from the annual financial statements of Firstline Global PRUC for the past year.

Extracts from annual accounts

Inventories: raw materials 108,000

work in progress 75,600

finished goods 86,400

Purchases of raw materials 518,400

Cost of production 675,000

Cost of goods sold 756,000

Sales 864,000

Receivables 172,800

Payables 86,400

Calculate the length of the working capital cycle (assuming 365 days in the year).

(10 marks)