DCS1630 ASSESSMENT 4 solutions SEMESTER 2 2024

Question 1
Sophie wants to buy the Ever-so-Young shop around the corner. The following cash flows are
involved

Time in years Cash flows (R)
2 200 000
3 –500 000
7 700 000
8 850 000
9 –210 000


Sophie can borrow money at 19% per annum while she can invest at 17,5% per annum.
The present value of the cash outflows is


a.
R340 590,94.
b.
R357 407,06.
c.
R524 888,51.
d.
R535 703,05.


Question 2
The following is the price equation for Bond 733:
96,80770=7,5a15¬i+32,0988896,80770=7,5a15¬i+32,09888
The yearly yield to maturity is


a.
7,87%.
b.
15,74%.
c.
16,55%.
d.

, 19,39%.


Question 3
An estate agent suspects that a linear relationship exists between the number of houses sold
(y) and the monthly loan payments (x). He analyses the following data over the past five
months:

Monthly loan
Number of houses
payments in
sold (y)
R1 000's (x)
3,7 16
5,6 25
7,5 80
18,9 45
28,4 12


The slope of the linear regression line is approximately
a.
−0,66.
b.
−0,25.
c.
−0,09.
d.
10,53.


Question 4
An estate agent suspects that a linear relationship exists between the number of houses sold
(y) and the monthly loan payments (x). He analyses the following data over the past five
months:

Monthly loan
Number of houses
payments in
sold (y)
R1 000's (x)
3,7 16
5,6 25