Exam (elaborations)
SECOND ASSESSMENT OPPORTUNITY QUESTIONS (CFM22A2 AO2 April 2014)
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Topics: 1. Time Value of Money 2. Bonds 3. Share valuation
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Department of Commercial AccountingCost and Financial Management 2A
CFM22A2
SECOND ASSESSMENT OPPORTUNITY
25 April 2013
Time: 90 minutes Marks: 50
Assessors: Mrs L Boyce
Mrs L Joubert
Mrs L Pelcher
Mr D du Plessis
Moderator: Mr R Boersma (Internal)
INSTRUCTIONS:
This paper consists of 8 pages (including the cover page)
Answer all questions in black/blue pen. Answers in tippex or pencil will not be marked.
Show all formulae, calculations and workings clearly.
Please start each question on a new answer sheet.
Scratch out empty pages and spaces
Silent, non-programmable calculators may be used.
Where applicable, round all calculations to two decimal places, unless stipulated otherwise.
Indicate your INDEX NUMBER and GROUP COLOUR on the front cover of your script.
Question Topic Marks Time
1 Time Value of Money 20 36 minutes
2 Bonds 20 36 minutes
3 Share valuation 10 18 minutes
50 90 minutes
, CFM22A2 COST AND FINANCIAL MANAGEMENT 2A 25 APRIL 2014
QUESTION 1 (20 MARKS)
1.1 You want to save for the next five years to go on an overseas trip. The trip
costs R40 000 per person. Assuming an inflation rate of 6%, how much will
the trip cost in five years? (3)
1.2 You have received R10 000 from your vacation work. If you invest the R10
000 today, earning an interest of 10% per annum compounded monthly and
you invest another R500 every month, also earning interest of 10% per
annum compounded monthly, for the next 2 years, how much will you have
saved? (3)
1.3 Siphiwe Tshabalala receives a bonus at the end of every full year that he
played on the Bafana Bafana team. His bonus at the end of 2014 will be R50
000, 2015 bonus R45 000, 2016 bonus R60 000. Assuming an interest of
20% per annum, calculate the present value of the cash flows. (4)
1.4 Mr Big wants to invest a lump sum that will benefit the Cancer Association on
a yearly basis indefinitely. He wants the investment to pay out R250 000
every year and that the annual payment must grow with 5% every year. The
investment vehicle guarantees a return of 15%. How much must Mr Big invest
today? (2)
1.5 How much will you have saved after 2 years if you deposit R500 at the
beginning of every month, earning interest of 12%? (3)
Use the following information to answer questions 1.6 – 1.8:
Ayanda have R100 000 saved for a deposit on a house. The house costs
R700 000. He receives a loan for 20 years at GMB Bank with an interest rate
of 6% per annum compounded monthly.
Required:
1.6 Calculate the monthly repayment? (3)
1.7 Calculate the capital portion of his repayment of month 10. (1)
1.8 Calculate the accumulated interest paid at the end of year 5. (1)
2
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