Question 01

Annual rate 13%

Quarterly
rate 0.0325

EAR 13.65%

CF 16000

Annual rate 14%

Years 12

90,564.67

0 1 to 10 11 to 20 21 to 30

27000 35000 48000

173,276.76 173,276.76 224,618.02 308,047.57

94881.08

54965.20

323,123.04

Loan 22,102,000

time 60

interest 0.7%

448,148.87
Question 02

Headache pain. 1.5 1.575 1.65375

0 1 2 3

-10200000 20000000 21000000 25000000

-7500000 -7875000 -8268750

Dep -3400000 -3400000 -3400000

profit 9100000 9725000 13331250

(-)Tax -2548000 -2723000 -3732750

PAT 6552000 7002000 9598500

(+)Dep 3400000 3400000 3400000

CFs -10200000 9952000 10402000 12998500

DCFs -10200000 8807079.646 8146291.8 9008612.534

NPV 15,761,983.98

Headache and arthritis pain

0 1 2 3
-12000000 40000000 42000000 50000000
-17000000 -17850000 -18742500
- - -
Dep 3666666.667 3666666.667 3666666.667
profit 19333333.33 20483333.33 27590833.33
- - -
(-)Tax 5413333.333 5735333.333 7725433.333
PAT 13920000 14748000 19865400
(+)Dep 3666666.667 3666666.667 3666666.667
CFs -12000000 17586666.67 18414666.67 23532066.67
Scrap 1000000
-12000000 17586666.67 18414666.67 24532066.67
-12000000 15563421.83 14421385.13 17001952.78

34,986,759.74
NPV
Headache and arthritis pain should be produced as that investment has a higher NPV.
Question 03

PV

D1 1.5 1.363636364

D2 2 1.652892562

D3 2.3 1.728024042

D4 2.415 1.649477495

PV @ T4 48.3 32.98954989

39.38358036

Bond A Bond B

CR 10% CR 6%

YTM 8% YTM 8%

FV 1000 FV 1000

Coupon 100 Coupon 60

PV of PV of
Coupon 399.27 Coupon 239.56

PV of FV 680.58 PV of FV 680.58

1079.85 920.15
Question 04

Item Cost Weights

Bank Loans 9.10% 0.1 0.91%

Bonds 10.51% 0.0875 0.92%

Preference Share 8.33% 0.0625 0.52%

Ordinary equity 16.00% 0.75 12.00%

14.35%