T1 EIC 6 (Tutorial)

Vince then hands out the following information sheet:

Total Capital Available: $100 mil 

Potential Assets for purchase:

• 787, E(R) = 12.5%, Price: 90mil
• A380, E(R) = 15%, Price: 120mil

• 747, E(R) = 14%, Price: 50mil

• A330, E(R) = 13.5%, Price: 50mil

T1 KCT 3  (Lecture)

A central concept of finance is recognising and understanding the flow of funds between surplus and deficit units in an economy.

Given that the flow of funds is working efficiently, which of the following is correct? (Select all correct answers below)

T1 KCT 5 (Tutorial)

You've just rotated into the Qantas capital budgeting team as a

graduate recruit and the CFO has called the first acquisitions meeting of the

year.

Everybody is given the following capital structure and cost summary: 

Qantas has

equity of $10.5 billion and debt of $6.4 billion. Shareholders need to earn 16%

p.a., which is a 700 basis point premium above what creditors need to earn.

Vince, the CFO, then asks ...

     " Calculate

the WACC of Qantas.”

(enter your answer as a pure number percentage e.g. 11.11 without %, $ or commas, to 2 decimal places. Warning: not following these instructions may result in Moodle not being able to recognise your answer and auto-marking your answer as wrong. Do not enter the percentage as a decimal. e.g. 11.11% answer is typed in as 11.11, not 0.11, which is a decimal.)

T1 EIC 4 (Lecture)

Mabel obtains takes out a cash advance on her credit card of $500 dollars. She decides to repay this loan within 1 month to minimise the 25% p.a. interest charge. 

Identify the markets that this transaction is a part of. (Select all correct answers)

Topic 1 EIC 2 (Lecture)

Monash Co. has a current WACC of 10%, which is going to change shortly due to a new interest rate it's lending bank will be charging.

Which of the following new WACCs would be preferred by Monash Co.? (Select all correct answers)

T4 EIC 4 (Lecture)

A project has the following cash flows:

Y0: -$1000     Y1: $100     Y2: $500      Y3: $800

Using a discount rate of 8%, calculate the NPV of the project. 

(enter your answer with a negative sign for -NPV, wihout a positive sign for +NPV, without $ or % or commas, to 2 decimal places. e.g. 888.88 or -888.88)

T4 EIC 1 (Lecture)

Given that Monash Co. capital creditors require a 10% return, which of the following returns on equity might be acceptable to shareholders? (select all correct answers)

T4 EIC 3 (Lecture)

A

company has debt that is 30% of capital. Equity holders earn 12%, which is a 4%

premium above what capital creditors require.

Calculate the WACC of the Company. (enter your percentage answer, not decimal answer, without $ or % or commas, to 2 decimal places. e.g. 888.88)

You are considering the following investment alternatives:

Term Deposit A: You invest $888 now for 2 years, where interest is calculated and paid monthly at 3% p.a.

Term Deposit B: In 1 years time, you invest $888 for 2 years, where interest is calculated and paid monthly at 3% p.a.

Calculate the Future Value of each deposit at maturity.

Comparing the Future Value of each deposit at maturity, which has the higher Value? 

You are thinking of buying a house in 3 years time and price of houses that you can afford then will be approximately $600,000.

The bank will lend you 80% of the price. This is called the LVR (Loan to Value Ratio). The remainder will be a deposit that you will have to contribute out of your own equity.

To save up for the deposit, you can invest a lump sum now into a 3 year term deposit which calculates and pays interest monthly at 4% p.a. 

How much will you have to invest now to accumulate a sufficient deposit in 3 years time?

Enter your answer as a pure number only, without $ or commas to 2 decimal places. e.g. if your answer is $105,445.54 it is to be entered as 105445.54

Not following this convention may result in the technology not recognising your answer.