ssa What is the IRR for a $925 investment that returns $200
ssa What is the IRR for a $925 investment that returns $200 at the… ssaWhat is the IRR for a $925 investment that returns $200 at the end of each of the next 2 years (Perform all calculations using 5 significant figures and round your answer to two decimal places)? 2) What is the IRR for a $875 investment that returns $175 at the end of each of the next 7 years? (Perform all calculations using 5 significant figures and round your answer to two decimal places. 3)What is the IRR for a $975 investment that returns $180 at the end of each of the next 6 years?(Perform all calculations using 5 significant figures and round your answer to two decimal places) 4)You have three contracts from which to choose. The first contract will require an outlay of 100,000 but will return 152,000 one year from now. The second contract requires an outlay of 200,000 and will return 304,000 one year from now. The third contract requres an outlay of 250,000 and will return 359,000 one year from now. Only one contract can be accepted. If your MARR is 20%, which one should you choose (Perform all calculations using 5 significant figures and round your answers to the nearest whole percent)? What is the IRR on the increment from doing nothing to Option 1? % Do you accept contract 1 at this point (enter either ‘Yes’ or ‘No’)? What is the IRR on the increment from Option 1 to Option 2? ____________% Do you accept contract 2 at this point (enter either ‘Yes’ or ‘No’)? __________ 5) What is the IRR for a $1,250 investment that returns $180 at the end of each of the next 100 years (Perform all calculations using 5 significant figures and round your answer to one decimal place?A country is currently in a recession.a. Illustrate this economy on a fully-labeled aggregate demand-aggregate supply model. Include aggregate demand, short-run aggregate supply, and long-run aggregate supply.I. Label the short-run equilibrium price level PLE and the short-run equilibrium output YE.II. Label the full-employment level of output YF.b. If the government and central bank do not intervene, how would this economy adjust in the long run? Explain.c. Illustrate the process of part (b) on your graph from part (a).d. The government decides to use fiscal policy to correct the economic situation in part (a). Assume the difference between the short-run and long-run equilibrium output is worth $36 billion, and the marginal propensity to consume is 0.75. Calculate one specific and effective fiscal policy action the government could take.e. What would be the short-run impact of the government’s action on the economy’s real output?f. What would be the short-run impact of the government’s action on the potential output of the economy?g. Will the long-run equilibrium price level if the government intervenes be less than, equal to, or greater than the long-run equilibrium price level without intervention?h. Show the impact of the government intervention from part (d) on the equilibrium real interest rate on a fully labeled loanable funds market graph.in Consider the same scenario as the example in class. However while the price of capital (r) remains at $10 per unit, the price of labor increases from $20 to $30. Here are the original Production Function and Isocost Curve equations:a. What is the new Isocost Curve Equation with the price change?b. Calculate the new cost-minimizing combination of L and K to produce 100 units of output.c. What is the cost associated with this bundle?d. Based on the graph in slide 52 & At Home country, the industry of canned tomato is a monopolistically competitive industry where all firms are identical, except for the fact that they produce slightly different varieties of canned tomato. When the firms in this industry increase production by one unit, their total cost increases by $12, irrespective of the total quantity of production. At zero production, the firms in the industry would incur a total cost of $3,000. (4 marks) Now assume that each firm in the industry has the same market share, so the quantity of tomato cans that each firm produces () is equal to the total sales in the market () divided by the number of participating firms (). Total sales in the market () are equal to $30,000. Derive the firms’ average cost to show that the average cost curve (CC) is given by:Curve: (2 marks) The demand side of the canned tomato market is represented by the following curve, which summarises price competition in the industry. Curve: Illustrate the curve and the curve on a graph with price and cost on the vertical axis, and the number of firms on the horizontal axis. Solve for the market equilibrium at Home in autarky, that is, find the equilibrium number of producers and the equilibrium price of canned tomato. (4 marks) Suppose that Home is now able to trade with two other identical countries. Solve for the trading equilibrium in the industry and illustrate this change in trading equilibrium on a graph (this new graph is based on the graph you drew in point (b), with the addition of the change in equilibrium after trade). (2 marks) Explain the effects of trade on the industry of tomato cans. Mboyamak Ltd. manufactures farm implements. The following list of balances was extracted from the books of account of the company as at 31 December 2012: Sh Inventory as at 1 January 2012: Raw materials 1,270,000 Work in progress 1,555,000 Finished goods 1,163,000 Purchase of raw materials 4,576,750 Carriage of raw materials 98,000 Direct labour 4,210,400 Office salaries 1,670,950 Rent 260,000 Electricity (office) 221,000 Depreciation expenses: Machinery 510,000 Equipment (office) 115,000 Sales 15,931,100 Electricity (factory) 406,000 Additional information: 1. Inventory as at 31 December 2012 was given as follows: Sh raw materials 1,445,000 Work in progress 1,230,000 Finished goods 1,442,000 2. Rent is to be apportioned between factory and office in the ratio 3:1 3. Finished goods are transferred from factory to sales at a mark up of 20 % 4. The values of opening and closing inventory are given at the transfer price. Required: i. Manufacturing account for the year ended 31 December 2012 ii. Income statement for the year ended 31 December 2012 (12 marks) (8 marks) (Total: 20 marks) www.someakenya.com QUESTION TWO a) Discuss five users of accounting information clearly indicating their information needs (10 marks) b) You have just been employed by Best way Ltd. as a trainee accountant. Your first exercise is to check the transactions in the company’s cash book, check entries in the bank statement, update the cash book and make any amendments as necessary after which you will prepare a bank reconciliation statement at the end of the month. The company’s cash book and bank statement for the month of March 2013 are provided below: Dr CASH BOOK (Bank column only) Cr Date Details Amount Date Details Amount Sh. 2013 Sh. “000” 2013 “000” 1-Mar Balance brought down 4,865 2-Mar Salama Insuarance 187.5 1-Mar Devco. & Co. Ltd. 622.5 2-Mar Hellen- cheque number 4100 515 5-Mar J. Karanja 470 4-Mar Orchards Ltd. – cheque number 4101 787.5 8-Mar P. Otieno 375 8-Mar Buki Garage- cheque number 4102 527.5 10-Mar Huge Ltd 1,100 9-Mar Value sure finance 300 18-Mar Tiny Ltd 162.5 13-Mar Joseph Baraka- cheque number 4103 55 27-Mar R. Nafula 1,300 20-Mar Good samaritan Ltd- cheque number 4104 342.5 30-Mar David and Partners 205 27-Mar Kenya power Ltd- cheque number 4105 675 31-Mar Balance carried down 5,710 9.100 9.100 Balance brought 1-Apr forward 5,710 Best way Ltd. Bank statement Date: 31 March 2013 Date 2013 1-Mar 2-Mar 4-Mar 5-Mar 6-Mar Details Balance Cheques Salama insurance Cheque number 4101 J. Karanja Debit Credit Balance Sh. “000” Sh.”000″ Sh.”000″ 4,865 CR 622.5 5,487.5CR 187.5 5,300CR 787.5 4,512.5CR 470 4982.5CR www.someakenya.com P. 9-Mar Otieno 375 5,357.5CR 9-Mar Cheque number 4102 527.5 4,830CR 12-Mar Cheques 1,100 5,930 CR 12-Mar Value sure Finance 300 5,630 CR 5,792.5 20-Mar Cheques 162.5 CR 28-Mar Kenya power 675 5,117.5CR 30-Mar Skyline Ltd 230 5,347.5CR 31-Mar Bank charges 137.5 5.210CR 31-Mar Bottom line co. Ltd 2,500 2,710 CR Required: A bank reconciliation statement as at 31 March 2013 (10 marks) (Total: 20 marks) QUESTION THREE Kanini, Lucy and Ndwiga are in a partnership sharing profits and losses in the ratio 3:2:1 respectively. Ndwiga decided to retire on 31 December 2012 and Gitonga was admitted as a partner on that date. The following is the partnership trial balance as at 31 December 2012. Sh Sh premise 1,800,000 plant 740,000 vehicles 300,000 equipment 40,000 inventory as a 31 December 2012 1,247,580 accounts receivables 699,600 cash 15,200 accounts payable 380720 bank overdraft 1. Revaluation: premises Sh. 2,400,000; Plant Sh. 700,000 and inventory Sh. 1,083,580 2. Allowance for doubtful debts amounting to Sh. 60,000 is to be provided www.someakenya.com 3. Goodwill amounting to Sh. 840,000 is to be provided in the books on the day Ndwiga retires. The partners in the new partnership do not wish to maintain goodwill 4. Kanini and Lucy are to share profits in the same ratio as before. Gitonga will have same share profits as Lucy. 5. Ndwiga is to take his car at book value of Sh. 78,000 in part payment, and the balance of all he is owed by the firm in cash except Sh. 400,000 which he is will to leave as a loan account 6. The partners in the new firm are to start on equal footing so far as capital and current account are concerned. Gitonga is to contribute cash to bring his capital and current accounts to the same amount as the original partner from the old firm who has the lower investment in the business. 7. The original partner in the old firm who has the higher investment will withdraw cash so that his capital and current account balances equal those of his new partners. Required: a) Partner’s capital account (6 marks) b) Partner’s current account (6 marks) c) Statement of financial position for the partnership of Kanini, Lucy and Gitonga as at 31 December 2012 (8 marks) (Total: 20 marks) QUESTION FOUR a) The following extracts are from the financial statements of SOY Ltd, as at 31 March: 2013 Sh. 2012 “000” Sh.”000″ Non- current assets Freehold land and building 50,400 36,000 Plant and machinery 17,580 19,050 Investment at cost 10,800 11,250 Goodwill 8,400 8,700 87,180 75,000 Current assets Inventory 30,150 26,100 Trade receivables 18,420 23,400 Short term investments 5,130 2,520 Cash in hand 600 1.290 54.300 53.310 141,480 128,310 Total assets Equity and liabilities Ordinary share capital 54,000 45,000 Share premium 4,500 2,250 Revaluation reserves 13,500 Revenue reserve 18,450 15,750 90.450 63.000 www.someakenya.com Non- current liabilities 14% loan stock 22.500 27.000 Current liabilities Trade payables 17,550 15,750 Bank overdraft 7,170 19,620 Proposed dividend 1,350 1,140 Taxation 2.460 1.800 28.530 38.310 Total equity and liabilities 141.480 128.310 Additional information: 1. The income statement extract for the year ended 31 March 2013 is as follows; Sh.”000″ Sh.”000″ Profit before tax 7,200 Less corporation tax 2.700 Profit afer tax 4,500 Dividends: Interim paid 450 Proposed 1.350 1.800 Retained earnings 2.700 2. During the year, plant with a net book value of Sh. 2,250,000 was sold for Sh. 4,410,000. The plant had originally cost Sh. 9,000,000 3. Part of the investment was sold during the year at a profit of Sh. 480,000 4. Depreciation on plant and machinery amounting to Sh. 3,450,000 was charged to the income statement during the year 5. During the year impairment of good will was estimated to be Sh. 1,260,000 6. The revaluation reserve relates to freehold land and building Required: Statement of cash flow in accordance with international accounting standard (IAS) 7 “statement of cash flow” (14 marks) b) Discuss three categories of financial ratios (6 marks) (Total: 20 marks) QUESTION FIVE The following were the estimates and actual expenditure or Barani ministry of Youth and Sports for the financial year ended 30 June 2012: Item Details Estimates Actual Sh.”000″ Sh.”000″ 201 Basic salaries 96,000 92,400 www.someakenya.com a) General account of vote (3 marks) b) Exchequer account (3 marks) c) Paymaster general (PMG) account (3 marks) d) Appropriation account for the year ended 30 June 2012 (8 marks) e) Statement of assets and liabilities as at 30 June 2012 (3 marks) 201 Other personal allowance 18,900 21,420 400 Utilities, supplies and salaries 56,300 47,800 450 Printing and stationery 12,400 12,100 250 Travelling expenses 42,500 44,700 280 Training expenses 9,200 7,300 305 Maintanance and repairs of equipment 2,500 1,880 500 Grants to youth clubs 8,900 8,900 Gross expenditure 246,700 236,500 600 Appropriation-in-aid 15,000 12,500 Net expenditure 231,700 224,000 Drawings from the exchequer during the financial year ended 30 June 2012 amounted to Sh. 226,000,000. Required: (Total: 20 marks)Accounting Business Financial Accounting BUSINESS 008
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