FIN3704 ASSESSMENT 5 OF SEM 2 2024 EXPECTED QUESTIONS AND SOLUTIONS (DUE 15 OCTOBER)
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Course
Applied Financial Management (FIN3704)
Institution
University Of South Africa (Unisa)
THIS DOCUMENT IS FIN3704 ASSESSMENT 5 OF SEM 2 2024 EXPECTED QUESTIONS AND SOLUTIONS (DUE 15 OCTOBER). TRHE SOLUTIONS ARE ON AN EXCEL WORKSHEET AS PROVIDED. USE IT AS A GUIDE TO OBTAIN ABOVE 75%
Parts A & B
Req. Ret. 9%
A) B)
Period Cash Flow Cash Flow
1 45,000 49,050
2 40,000 47,524
3 35,000 45,326
4 30,000 42,347
5 25,000 38,466
PV R139,479.07
FV R222,713.06
Part C It is worth less, higher
years as compared to th
takes into account time
Period Cash Flow Cash Flow later yeasrs cashflo
0 (100,000) (100,000)
1 45,000 R 20,000
2 40,000 30,000
3 35,000 35,000
4 30,000 40,000
5 25,000 45,000
IRR 25.00% 18.04%
Part D
Both investments are still lucrative given that the
return is above my required retun by over double.
, Period Cash Flow
1 R 20,000 Change in Cash Flow -5000
2 30,000
3 35,000
4 40,000
5 45,000
PV $128,209.37
It is worth less, higher payments are in later
years as compared to the original given that PV
takes into account time value pf money, those
later yeasrs cashflow has lesser value
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