Finance Question and Answer 2022

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Finance

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Table of Contents
1..................................................................................................................................................3
a).............................................................................................................................................3
b)............................................................................................................................................3
c).............................................................................................................................................3
d)............................................................................................................................................4
e).............................................................................................................................................4
f).............................................................................................................................................4
Question 2..................................................................................................................................5
a).............................................................................................................................................5
b)............................................................................................................................................5
Question 3..................................................................................................................................6
a).............................................................................................................................................6
References..................................................................................................................................8
Appendix....................................................................................................................................9

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1.
a)
The loan which is taken by the company is required to be ascertained and for that, the
provided data in relation to the amount which is paid as installments will be taken into
account. There is a period of 5 years in which the loan will be repaid in the monthly
instalments and the calculation for the same is as provided hereunder:
Particulars Amount
amount of Instalment 891
Period 60
Interest rate 0.5
The present value of
borrowings
46087.47
b)
The company is making sales and the same is increasing at a constant rate in all the years. For
that, the calculation will be made and with that, the amount of sales which will be made in 5
years will be determined.
Particulars Amount
Annual revenue 247.7
Time period 5
Annual growth
rate
9.90%
Future value
multiplier
1.603
Sales in 5 years 397.11
c)
The APR is provided for the various options of the loan that are available and on that basis,
there will be the determination of the effective interest rate. There is the time period that is
provided and it will be adjusted as per the compounding frequency.
Particulars APR Period EAR
Loan A 5.45% 12 5.59%
Loan B 5.50% 2 5.58%