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Mrs Magudumana, owner of the Lovely Nail Bar, will discharge a debt that will be worth
R870 000 eight years from now using the sinking fund method. The debt’s interest rate is
13,4% per year, compounded quarterly. The sinking fund will earn interest at a rate of 9,2%
per year, compounded monthly. Her monthly deposit into the sinking fund is


A.
R5 102,65.


B.
R6 166,12.


C.
R9 062,50.


D.
R15 582,62.


If the NPV (net present value) of a shop is R195 000 and the profitability index is 1,24375,
the initial investment in the shop is


A.
R86 908.


B.
R156 784.


C.
R195 000.


D.

R800 000.

,You must choose between two investments, a shebeen and a hardware shop. The profitability
index (PI), net present value (NPV) and internal rate of return (IRR) of the two investments
are as follows:



CRITERIA SHEBEEN HARDWARE SHOP
NPV 44 000 - 22 000
PI 1,945 0,071
IRR 16,00% 8,04%


What investment/s should you choose, taking all the above criteria into consideration, if the
cost of capital is equal to 12% per year?


A.
hardware


B.
neither Shebeen nor Hardware shop


C.

shebeen


D.
both Shebeen and Hardware shops

, Consider Bond XXX:

Coupon rate: 10,9% per year

Yield to maturity: 8,7% per year

Settlement date: 12 August 2023

Maturity date: 8 March 2053

NOTE: Do not take into account an extra day for leap years.

What is the value of n, the number of half-years from the next coupon date until maturity?


A.
29


B.
27


C.

59


D.
60