Finance Question Answer 2022

Running head: FINANCE
Finance
Name of the Student
Name of the University
Author Note

FINANCE1
Table of Contents
Analysis of Business Transactions...............................................................................................2
Ratios to be used to analyse the business.....................................................................................2
References....................................................................................................................................3

FINANCE2
Answer to Question 1
IRR of the project 5%
Time period of the project (in years) 3
Value of Initial Investment ?
Annual cash flows 10000
Details of the project
Year 0 -30000 -31500 -57232
Year 1 10000 10000 10000
Year 2 10000 10000 10000
Year 3 10000 10000 10000
IRR 0% -2% -26%
Answer is D
Answer to Question 2
Particulars Year 0 Year 1 Year 2 Year 3 Year 4
Initial Investment ($102,500
)
Cash Inflows - - $9,800 $48,700 $82,900
Discount Rate 0.9174312 0.84167999 0.77218348 0.7084252
1
Present Value of Inflows - - $8,248.46 $37,605.34 $58,728.45
Cumulative Cash Flow ($102,500
)
($102,500
)
($94,251.54
)
($56,646.20
)
$2,082.25
Discounted Payback
Period
3.9645445
Total Cost of Investment ($102,500)
Year 0 ($102,500)
Year 2 9800
Year 3 48700
Year 4 82900
Required Discounted Payback Period (in 3.5

FINANCE3
years)
Discount Rate 9%
Answer E
Answer to Question 3
D
Answer to Question 4
E
Answer to Question 5
Cost of Machinery at the time of purchase $
229,380.00
Useful Life of the Machinery (in years) 8
Method of Depreciation is the Straight Line
Method
Tax Rate 35%
Discount Rate 16%
Annual depreciation on the machinery $
28,672.50
Accumulated Depreciation $
143,362.50
Book Value of the asset $
86,017.50
After Tax Salvage Value $
78,531.13
After Tax Salvage Value 37389.69073
Answer D
Answer to Question 6
B
Answer to Question 7
IRR 13.09%
Beta 1.21
Market Risk Premium 8.10%