FIN3703 ASSIGNMENT 1 SEMESTER 2 2026 - COMPLETE ANSWERS

, FIN3703
ASSIGNMENT 1 SEMESTER 2
2026
DUE AUGUST 2026
SECTION A (26 MARKS)

QUESTION 1 (2)
The correct option is: 3. b and c
(The management of the cost of capital, capital structure and dividend pay-out falls under
Corporate Finance, not Treasury Management. The management of financial, operational, and
strategic risks falls under Risk Management.)

QUESTION 2 (2)
The correct option is: 1. a
(An interest rate swap involves exchanging a floating rate commitment for a fixed rate.)

QUESTION 3 (2)
Interest = Principal × Rate × (Days/365)
Interest = R350,000 × 10% × (29/365)
Interest = R350,000 × 0.10 × 0.07945
Interest = R2,780.82

QUESTION 4 (2)
Net interest = (Interest on debits) - (Interest on credits)
Limpopo (debit): R400,000 × 10% = R40,000 payable
Gauteng (credit of -R350,000 means a surplus of R350,000): R350,000 × 7% = R24,500 earned
KZN (debit): R200,000 × 10% = R20,000 payable
Northwest (debit): R100,000 × 10% = R10,000 payable
Total payable = R40,000 + R20,000 + R10,000 = R70,000
Total earned = R24,500
Net interest payable = R70,000 - R24,500 = R45,500 payable

QUESTION 5 (2)
Master account balance = Master account + Limpopo + Gauteng + KZN + Northwest
Master account = -R1,000,000 (debit)
Limpopo = -R400,000 (debit)
Gauteng = +R350,000 (credit/surplus, because -R350,000 is a credit balance)
KZN = -R200,000 (debit)