[TYPE THE COMPANY NAME]
FIN2603 Assignment 2
(COMPLETE ANSWERS)
Semester 1 2026 - DUE 21
April 2026
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
FIN2603 Assignment 2 (COMPLETE
ANSWERS) Semester 1 2026 - DUE 21 April
2026
FIN2603 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 21
April 2026; 100% TRUSTED Complete, trusted solutions and explanations.
Ensure your success with us.
Question 1
You invest R1 000 annually (at the end of each year) for 5 consecutive years in a savings
account earning 9% per annum compound interest.
At the end of year 5, you withdraw R984.71, and the remaining balance is reinvested at 13% per
annum, compounded semi-annually, for 4 years.
The final value of the investment is closest to:
a. R6 655
b. R5 000
c. R9 655
d. R8 275
Question 2
A firm has a loan with an interest rate of 15% and is subject to a tax rate of 30%.
What is the firm’s after-tax cost of debt?
a. 15.0%
b. 22.5%
c. 10.5%
d. 4.5%
Question 3
Armico Ltd makes an initial investment of R1 000 000 in a new project. The firm’s cost of
capital is 13%.
, Expected cash inflows:
Year 1: R50 000
Year 2: R60 000
Year 3: R70 000
Year 4: R400 000
Year 5: R500 000
What is the Net Present Value (NPV)?
a. R1
b. –R343 542
c. R343 542
d. R400 879
Question 4
Nelson, a financial manager, plans to replace a machine in 4 years, costing R150 000 at that
time.
If equal end-of-year deposits are made into an account earning 10% interest per annum, what
should each deposit be?
a. R45 345.78
b. R23 535.24
c. R29 382.38
d. R32 320.62
Question 5
The payback period should ideally be:
a. As long as the duration of the project
b. Longer than the duration of the project
c. As long as possible
d. As short as possible
Question 6
The cost of not taking a cash discount under terms 3/10, net 30 (360-day year) is:
a. 37.11%
b. 118.68%
FIN2603 Assignment 2
(COMPLETE ANSWERS)
Semester 1 2026 - DUE 21
April 2026
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
,Exam (elaborations)
FIN2603 Assignment 2 (COMPLETE
ANSWERS) Semester 1 2026 - DUE 21 April
2026
FIN2603 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 21
April 2026; 100% TRUSTED Complete, trusted solutions and explanations.
Ensure your success with us.
Question 1
You invest R1 000 annually (at the end of each year) for 5 consecutive years in a savings
account earning 9% per annum compound interest.
At the end of year 5, you withdraw R984.71, and the remaining balance is reinvested at 13% per
annum, compounded semi-annually, for 4 years.
The final value of the investment is closest to:
a. R6 655
b. R5 000
c. R9 655
d. R8 275
Question 2
A firm has a loan with an interest rate of 15% and is subject to a tax rate of 30%.
What is the firm’s after-tax cost of debt?
a. 15.0%
b. 22.5%
c. 10.5%
d. 4.5%
Question 3
Armico Ltd makes an initial investment of R1 000 000 in a new project. The firm’s cost of
capital is 13%.
, Expected cash inflows:
Year 1: R50 000
Year 2: R60 000
Year 3: R70 000
Year 4: R400 000
Year 5: R500 000
What is the Net Present Value (NPV)?
a. R1
b. –R343 542
c. R343 542
d. R400 879
Question 4
Nelson, a financial manager, plans to replace a machine in 4 years, costing R150 000 at that
time.
If equal end-of-year deposits are made into an account earning 10% interest per annum, what
should each deposit be?
a. R45 345.78
b. R23 535.24
c. R29 382.38
d. R32 320.62
Question 5
The payback period should ideally be:
a. As long as the duration of the project
b. Longer than the duration of the project
c. As long as possible
d. As short as possible
Question 6
The cost of not taking a cash discount under terms 3/10, net 30 (360-day year) is:
a. 37.11%
b. 118.68%
