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. For assistance, Whats-App 0.8.1..2.7.8..3.3.7.2... Ensure your success with us....You invest R1 000 annually (at the end of each year) for 5 successive years in a savings account at 9% p.a. compound interest. At the end of the fifth year you withdraw R984, 71 and the balance is invested at 13% interest p.a., compounded semi-annually for four years. The end value of the investment is closest to R6 655 R5 000 R9 655 d. R8 275 A firm has a loan with an interest rate of 15%. The firm 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% Clear my choice Armico Ltd has made an initial investment of R1000 000 in a new project. The firm’s cost of capital is 13%. The investment is expected to generate the following cash inflows over the next five years: Year 1: R 50 000 Year 2: R 60 000 Year 3: R 70 000 Year 4: R400 000 Year 5: R500 000 The Net present value (NPV) is ... a. R1 b. -R343 542 c. R343 542 d. R400 879 Clear my choice Time left 1:58:34 Font size A- A A+ Site color R A A A Question 3 Not yet answered Marked out of 1.00 Nelson, the financial manager of an export company, wishes to replace a machine four years from now, with a new machine that will cost R150 000 in four years' time. If equal end-of-the-year deposits are made in an account paying annual interest of 10 per cent, what are the size of each deposit? a. R 45 345.78 b. R 23 535.24 c. R 29 382.38 d. R 32 320.62 Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 4 Not yet answered Marked out of 1.00 Question 5 Not yet answered Marked out of 1.00 QUIZ 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. Clear my choice The cost of a giving-up-cash discount under the terms of sale 3/10 net 30 is ... (Assume a 360-day year.) a. 37.11% b. 118.68% c. 55.67% d. 112.76% Clear my choice Time left 1:56:38 Font size A- A A+ Site color R A A A Question 6 Not yet answered Marked out of 2.00 You invest R1 000 annually (at the end of each year) for 5 successive years in a savings account at 9% p.a. compound interest. At the end of the fifth year you withdraw R984, 71 and the balance is invested at 13% interest p.a., compounded semi-annually for four years. The end value of the investment is closest to ... a. R6 655 b. R5 000 c. R9 655 d. R8 275 Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 7 Not yet answered Marked out of 1.00 Question 8 Not yet answered Marked out of 1.00 QUIZ If R50 000 was invested in a fund offering a rate of 15% per year, approximately how many years will it take for the investment to reach R100 000? a. 5 years b. 7 years c. 13 years d. 4 years Clear my choice A firm with a cash conversion cycle of 50 days can stretch its average payment period from 15 days to 30 days. This will result in a/an ... a. decrease of 15 days in the cash conversion cycle. b. increase of 15 days in the cash conversion cycle. c. increase of 10 days in the cash conversion cycle. d. decrease of 30 days in the cash conversion cycle. Clear my choice Time left 1:54:56 Font size A- A A+ Site color R A A A Question 9 Not yet answered Marked out of 1.00 What is the present value of an annuity that pays R12 500 in five equal annual payments assuming a discount rate of 7%? a. R72 329.67 b. R52 606.24 c. R51 252.47 d. R 8 912.33 Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 10 Not yet answered Marked out of 1.00 Question 11 Not yet answered Marked out of 1.00 QUIZ Metropolitan has a cost of capital of 13% and it is evaluating the possibility of investing in three capital projects. The internal rates of return for each projected has be calculated are as follows: PROJECT 1: 12% (IRR) PROJECT 2: 15% (IRR) PROJECT 3: 13% (IRR) Metropolitan should ...____ a. accept project 3 and reject projects 1 and 2. b. accept project 2 and reject projects 1 and 3. c. accept projects 2 and 3, and reject project 1. d. accept project 1 and reject projects 2 and 3. Clear my choice What amount would you have to invest today at an annual interest rate of 11% in order to have R125 000 saved in 18 years’ time? a. R817 944.11 b. R 20 239.88 c. R 19 102.77 d. R771 990.74 Clear my choice Time left 1:52:26 Font size A- A A+ Site color R A A A Question 12 Not yet answered Marked out of 1.00 Calculate the present value of the following stream of cash flows by assuming that the organisation has an opportunity cost of 12%. Years 1–3: R 23 000 Years 4–7: R 38 000 a. R137 395.28 b. R100 268.41 c. R 71 203.41 d. R122 268.41 Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 13 Not yet answered Marked out of 1.00 Question 14 Not yet answered Marked out of 1.00 QUIZ If you were to invest R150 000 in a savings account that earns 12% interest compounded semi-annually today, how much would you have in the account at the end of a 10-year period? a. R 481 070.32 b. R1 446 943.96 c. R 268 627.16 d. R 465 877.23 Clear my choice A company has a cash conversion cycle of 50 days. Annual outlays are R10 million and the cost of negotiated financing is 9%. Calculate its annual savings if the company reduces its average age of inventory by 15 days. Assume 360 days per year. a. R125 000 b. R 15 679 c. R 87 500 d. R 37 500 Clear my choice Time left 1:51:00 Font size A- A A+ Site color R A A A Question 15 Not yet answered Marked out of 1.00 Calculate the future value (FV) of R10 000 invested for 5 years at an interest rate of 7%, interest compounded semi-annually. a. R14 900 b. R16 234 c. R14 106 d. R14 026 Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 16 Not yet answered Marked out of 1.00 Question 17 Not yet answered Marked out of 1.00 QUIZ A firm is offered payment terms of 3/15 net 60 by a supplier. Calculate the cost of giving up the cash discount. Assume a 365 day year. a. 15.05% b. 113.00% c. 25.09% d. 18.81% Clear my choice ABC Limited purchased raw materials on account and paid for them within 30 days. The raw materials were used in the manufacturing of finished goods that were sold on account 100 days after the raw materials had been purchased. The customer paid for the finished goods 60 days later. Calculate the company’s cash conversion cycle. a. 130 days b. 10 days c. 70 days d. 190 days Clear my choice Time left 1:48:44 Font size A- A A+ Site color R A A A Question 18 Not yet answered Marked out of 1.00 How much should Alfred invest today at 9% interest per annum, compounded quarterly, to be able to buy a house worth R2 500 000 six years from today? a. R1 954 322.19 b. R1 465 616.71 c. R 672 971.33 d. R1 115 564.17 Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 19 Not yet answered Marked out of 1.00 Question 20 Not yet answered Marked out of 1.00 QUIZ CBlue Ltd has made an initial investment of R500 000 on a new project. The firm’s cost of capital is 8%. The investment is expected to generate the following cash inflows: Year 1: R100 000 Year 2: R120 000 Year 3: R 80 000 Year 4: R140 000 Year 5: R 30 000 The profitability index (PI) is...thus the investment should ... a. 1.3079; not be undertaken. b. 1.3079; be undertaken. c. 0.7646; not be undertaken. d. 0.7646; be undertaken. Clear my choice Calculate the present value (PV) of R100 000 received 9 years from today at an interest rate of 12%. a. R36 061 b. R27 895 c. R37 980 d. R43 998 Clear my choice Time left 1:47:21 Font size A- A A+ Site color R A A A Question 21 Not yet answered Marked out of 1.00 Which one of the following statements is incorrect? a. Tightening of credit standards will cause a decrease in bad debt costs. b. Relaxation of credit standards will cause a decrease in bad debt costs. c. Relaxation of credit standards will cause an increase in accounts receivable. d. Relaxation of credit standards will cause an increase in sales volume. Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 22 Answer saved Marked out of 1.00 Question 23 Answer saved Marked out of 1.00 QUIZ Risetoshine Ltd. has determined its optimal capital structure, which comprises the following: FORM OF CAPITAL WEIGHT AFTER-TAX COST Long-term debt 60% 5% Preference shares 15% 13% Ordinary shares 25% 10% The weighted average cost of capital is ... a. 9.65% b. 8.35% c. 11.43% d. 7.45% Clear my choice Calculate the growth rate of the following stream of cash flows: YEAR CASH FLOW 2024 R 3 600 2023 R 3 000 2022 R 1 900 2021 R 1 000 a. 26% b. 53% c. 43% d. 23% Clear my choice Time left 1:46:02 Font size A- A A+ Site color R A A A Question 24 Answer saved Marked out of 1.00 If Conrad invests R2 000 at the beginning of each year at an interest rate of 10 per cent over a five year period, the future value of the investment would be ... a. R13 431.22. b. R12 210.20. c. R 6 715.61. d. R 6 105.10. Clear my choice Font size A- A A+ Site color R A A A UNISA  2026  FIN2603-26-S1  Assessment 2 Question 25 Not yet answered Marked out of 1.00 QUIZ Calculate the economic order quantity given the following information: 1 600 units used annually. Ordering costs amount to R210 per order. Carrying costs are R180 per unit per year. a. 4 units b. 61 units c. 52 units d. 43 units