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Business finance Virtual University
ACC501-Business Finance
Final Term Special 2006
Special Thanks to Asima Waheed for providing this paper
1. What is effective annual rate of 9% compounded monthly?
9.53%
9.38%
9.32%
9.00%
1. An investment is acceptable if its calculated___________is less than some specified number of years.
2. The net credit period for a company with terms of 3/10 net 60 is : ?
3. The main difference between a positive and negative covenant is (are): ?
4. Assume that Younas Corporation, which operates a fleet of ships, is considering replacing them with a new model. The data in table below are available for the old and new ships.
Items Old ships New ships
1. cash inflows Rs 120 million p.a Rs 135 millions
2. cash outflows 55 millions p.a 60 millions
3. estimated life 5 years 8 years
Disposal value:
a) at present
b) in 8 years time
Rs 20 millions
Nill 8 millions
Cost of new ships 175 millions
Required rate of return 15% pa 15% pa
ACC501-Business Finance
Final Term Special 2006
Special Thanks to Asima Waheed for providing this paper
1. What is effective annual rate of 9% compounded monthly?
9.53%
9.38%
9.32%
9.00%
1. An investment is acceptable if its calculated___________is less than some specified number of years.
2. The net credit period for a company with terms of 3/10 net 60 is : ?
3. The main difference between a positive and negative covenant is (are): ?
4. Assume that Younas Corporation, which operates a fleet of ships, is considering replacing them with a new model. The data in table below are available for the old and new ships.
Items Old ships New ships
1. cash inflows Rs 120 million p.a Rs 135 millions
2. cash outflows 55 millions p.a 60 millions
3. estimated life 5 years 8 years
Disposal value:
a) at present
b) in 8 years time
Rs 20 millions
Nill 8 millions
Cost of new ships 175 millions
Required rate of return 15% pa 15% pa