Exam paper for first year

Question no 1: 10M

Calculate for the following information payback period and NPV and advise
to the company basing on your results which project should be selected
according to pay back period and NPV

Year Cash flow Project x Project Y

0 Cash outflow 50000 40000
1 Cash inflow 150000 125000
2 Cash inflow 200000 175000
3 Cash inflow 125000 100000
4 Cash inflow 100000 75000
5 Cash inflow 85000 75000
6 Cash inflow 95000 100000
7 Cash inflow 120000 11000

Assuming required rate of return being 12%

Question no 2: Prepare a comparative balance sheet from the following

information 10M

Particulars 2012 2013 Particulars 2012 2013

Equity share capital 900 1300 Current assets
Capital reserves 140 240 Debtors 518 390
General reserves 544 518 Cash 336 40
Sinking fund 100 200 Stock 440 340
Fixed liabilities Others 64 26
Debentures 500 750 Investments 640 440
Current liabilities Fixed assets
Sundry creditors 610 344 Furniture ( less 20 38
depreciation )
Others 18 24 Buildings ( less 744 1672
deprecation
Lease property 60 90
Other assets 142 168
Bills payable 156 2 machinery 4 174
2968 3378 2968 3378
3. Prepare comparative income statement from the following information.
10M

Particulars 2012 2013 Particulars 2012 2013

To cost of goods 100000 100000 By sales 250000 300000
sold
To operating 75000 110000
expenses
To interest 25000 20000
To tax 25000 30000
To net profit 25000 40000
250000 300000 250000 300000

Case study ( 20 M)

X plans for the future he invests 100000 every year in fixed savings account
for a span of 10 years with a interest rate of 12% in order to get her daughter
married. Which is 25 years from the date of savings started. The money
received after ten years by him which he invested for ten years he will invest
the amount which he received from investment made for ten years in
debentures of the company with a discount rate of 15%.

The amount received by him after twenty five years will be reinvested
for another two years with a discount rate of 14% because of the daughter
marriage postponed in order to achieve MBA qualification .

He also wants to know the amount required for him to open a charity
after 25 years on that day he assumes that he should have an amount of
2500000 in the bank account he wants to know that how much he have to save
per annum in order to achieve his goal after 25 years.

At present he is earning a monthly salary of 125000 per month and he

wants to save 25% of his salary for ten years towards his medical expenses
which may occur to or his family in the future, interest rate being 13% after
the completion of ten years he wants to reinvest the amount received in fixed
deposit which will give 14% interest.

He expcets a increase in the salary by 10% every year and he wants to

invest that amount in to the recurring deposits in the post office for ten years.

Explain in detail how much amount required and how much the amount will
receive from all of the above investments and proposals explain them in detail
by taking into present value tables wherever necessary.