Accounting and Finance - Study Material and Solved Assignments

Running head: ACCOUNTING AND FINANCE
Accounting and Finance
Name of the Student:
Name of the University:
Authors Note:

ACCOUNTING AND FINANCE 2
Table of Contents
Question 1:.................................................................................................................................4
a.i) Choosing the payment option for Jayne:.............................................................................4
a.ii) Mentioning the time which will be taken with monthly 1000 instalment:.........................4
b.i) Identifying monthly payment of Jenifer:.............................................................................4
b.ii) Identifying the gift value:...................................................................................................5
b.iii) Identifying the monthly loan repayment value:.................................................................5
Question 2:.................................................................................................................................5
i) Stating the timeline of the ordinary shares:............................................................................5
ii) Stating the Kai’s investment portfolio at market value:........................................................6
Question 3:.................................................................................................................................6
i) Stating the differences between the classical taxation system and the dividend imputation
taxation system:..........................................................................................................................6
ii) Mentioning the examples:.....................................................................................................7
iii) Mentioning the impact of dividend imputation taxation system on domestic and
international investors:...............................................................................................................9
Question 4:...............................................................................................................................10
1) WBC, CBA and Market return plotting in line graph:........................................................10
2) Average holding period return for the three investments:...................................................10
3) Annual holding period return for the three investments:.....................................................10
4) Standard deviation for the three investments:......................................................................11
5) Plotting return and risk of the three investments:................................................................11
6) Calculating CAPM returns of CBA and WBC:...................................................................11
7) Using Scatter plot to construct SML:..................................................................................12
8) Portfolio comprising of WBC and CBA:.............................................................................12

ACCOUNTING AND FINANCE 3
9) Mentioning the best available investment option:...............................................................12
Reference and Bibliography:....................................................................................................14
Appendices:..............................................................................................................................15

ACCOUNTING AND FINANCE 4
Question 1:
a.i) Choosing the payment option for Jayne:
Particulars Value
New house $ 500,000
Time 30
Weekly-pay interest rate 4.55%
Fortnight interest rate 4.75%
Weekly Payments $ 587.67
Fortnight Payments $ 1,203.22
Total Payment weekly $ 916,763.44
Total Payment fortnight $ 938,514.28
The above calculation directly indicates that use of weekly pay would be beneficial
for the Jayne, as it incurs lower payment than the fortnight. The use of weekly pay would
reduce the total payment by $21,750.83.
a.ii) Mentioning the time which will be taken with monthly 1000 instalment:
Particulars Value Weekly-pay interest rate Fortnight interest rate
New house $ 500,000 4.55% 4.75%
Time 30 1560 780
PMT 1000 0.000875 0.001826923
Weekly-
pay
415 8
Fortnight 356 14
From the overall evaluation it can be detected that Weekly pay will be completed
within 8 years if per month payment is at the levels of 1,000. In addition, the fortnight
method would eventually increase the level to 14 years with a payment of 1,000.