FIN2601 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 24 April 2026

FIN2601 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 24 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.. A life insurance company offers an investment product that promises to pay R1 250 every year indefinitely, with paymentscontinuing to beneficiaries as well. If investors require a return of 7% on similar investments, what is the maximum amountyou should be willing to pay for this policy? 1. R 875,45 2. R10 354,90 3. R17 857,14 4. R19 543,23 Clear my choice × Question 2 Not yet answered Marked out of 1.00 Question 3 Not yet answered Marked out of 1.00 Kane obtained a loan of R18 000 that carries an interest rate of 8% per year, compounded monthly. The loan will be repaid infive equal annual instalments made at the end of each year. After he has made his first annual payment, what will be theoutstanding loan balance at the end of year one? 1. R 7 048,89 2. R12 249,50 3. R14 950,08 4. R17 755,02 Clear my choice After selling his vehicle, Alexander agreed to receive payment in the form of a series of future cash inflows rather than cashup front. The cash receipts will be received over the next four years as shown below. If money is discounted at 6% per year,what is the present value of this payment arrangement (i.e. the effective selling price of the car)? Years 0 1 2 3 4 Cash flow R0 R3 000 R6 000 R9 000 R12 000 1. R25 231,86 2. R26 745,77 3. R27 466,32 4. R28 290,31 Clear my choice Question 4 Not yet answered Marked out of 1.00 Question 5 Not yet answered Marked out of 1.00 On the day he stops working, Elliott has accumulated R411 016 in a retirement investment account. The funds earn interestat an annual rate of 7,10%, compounded monthly. He plans to withdraw R2 500 at the beginning of every month, startingimmediately. After how many months will the balance in the account be reduced to zero? 1. 16,42 years 2. 34,56 years 3. 48,19 years 4. 50,89 years Clear my choice Ezra’s uncle plans to retire immediately and has accumulated savings of R589 000. He expects the funds to earn 9% per yearand estimates that he will need an income for the next 19 years. If withdrawals are made at the beginning of each year, howmuch can he withdraw annually so that the account balance will be exactly zero after 19 years? 1. R33 128,63 2. R33 377,10 3. R60 375,42 4. R65 809,21 Clear my choice Question 6 Not yet answered Marked out of 1.00 Question 7 Not yet answered Marked out of 1.00 A 45-year-old man deposits R2 500 at the end of each quarter into a retirement fund until he turns 60. No further deposits aremade after that age. The fund earns interest at 6% per year, compounded quarterly. How much will be accumulated in theaccount when he retires at age 65? 1. R398 250,21 2. R323 967,95 3. R489 730,10 4. R525 610,00 Clear my choice Clistetech Automations is saving for new equipment to be purchased three years from today. The company deposited R16500 one year ago, deposits R12 000 today and plans to deposit R20 000 one year from today. If the investment account earns5,5% interest per year, how much will be available at the time of purchase? 1. R51 211, 35 2. R53 408, 33 3. R56 792,01 4. R58 021,87 Clear my choice Question 8 Not yet answered Marked out of 1.00 Huxley plans to purchase a construction vehicle in three years’ time. To finance this purchase, he will save R10 500 at the endof each year for the next three years in an account earning 8,2% interest per year. How much will be accumulatedimmediately after the third deposit? 1. R33 150,21 2. R34 153,60 3. R36 980,01 4. R38 420,67 Clear my choice FIN2601-26-S1  Welcome Message  Assessment 2 Question 9 Not yet answered Marked out of 1.00 QUIZ Face not found. Try changing your camera to a better lighting. Thanks. The Breakfast Bakers has a debt ratio of 30% and total assets of R. The company’s total asset turnover is 0,90,while its return on equity (ROE) is 18%. What is the company’s net profit margin? 1. 12% 2. 14% 3. 18% 4. 21% Clear my choice × Question 10 Not yet answered Marked out of 1.00 Question 11 Not yet answered Marked out of 1.00 Engineering Innovations has recently issued the following financial figure in relation to their financial statement for thefinancial period ended 2024. Net profit margin 7% Debt ratio 80% Average collection period 40 days Trade receivables R100 000 Total liabilities R Based on the above financial information, what is the company’s return on asset (ROA) (assume 365 days in a year)? 1. 2,04% 2. 3,50% 3. 5,60% 4. 7,57% Clear my choice Felix just started working as a graduate intern at one of the top financial firms in the country. His mentor assigns him a newlyprivatised company and requests that he determine the book value per share. As he reviewed the company’s financial data,he discovered that it had issued 350 000 shares, a net profit for the year of R700 000, an average price to earnings (P/E) of 3,and an average market to book value of 1,50. What is the likely book value? 1. R2,00 2. R3,00 3. R4,00 4. R6,00 Clear my choice Question 12 Not yet answered Marked out of 1.00 Question 13 Not yet answered Marked out of 1.00 Farmers Homestead reported a gross profit of R and operating expenses of R at the end of the year. Thecompany had R80 000 in total assets, its average tax rate was 40% and its return on assets (ROA) was 3%. What is thecompany times interest earned (TIE) ratio? 1. 1,00 times 2. 1,04 times 3. 1,33 times 4. 1,71 times Clear my choice Merchants & Retailers was previously financially illiquid. Management has published the company’s most recent financialinformation to assess whether its liquidity position has improved. They had a cost of goods sold to the value of R, acurrent ratio of 1,5, an inventory turnover of 4 and current liabilities of R600 000. What is the company’s quick ratio? 1. 0,88 2. 1,08 3. 1,25 4. 1,30 Clear my choice Question 14 Not yet answered Marked out of 1.00 Question 15 Not yet answered Marked out of 1.00 Professional Pc Parameters earned R840 000 in net profit for the year, R in sales, 0,75 in total asset turnover and28% in return on equity (ROE). If the company does not incorporate preference share capital in their capital structure, whatwould the company’s debt ratio be? 1. 24,90% 2. 32,14% 3. 46,43% 4. 55,00% Clear my choice Heat Wave Geothermal Energy reported a net profit for the year of R360 000 and sales of R. The company had areturn on equity (ROE) of 12% and an equity multiplier of 1,50. What is the company’s total asset turnover ratio? 1. 2,00 times 2. 2,07 times 3. 2,09 times 4. 2,11 times Clear my choice FIN2601-26-S1  Welcome Message  Assessment 2 Question 16 Not yet answered Marked out of 1.00 QUIZ Face not found. Try changing your camera to a better lighting. Thanks. FrostPeak Adventures follows a constant dividend growth policy. The company paid a dividend of R2,90 per share this yearand expects to pay a dividend of R3,05 per share next year. If the required rate of return is 11,7%, what will be the value of oneordinary share five years from now? 1. R34,28 2. R57,64 3. R60,09 4. R73,91 Clear my choice × Question 17 Not yet answered Marked out of 1.00 Question 18 Not yet answered Marked out of 1.00 Berkshire Hathaway has just paid an ordinary dividend of R7,20. The dividends are expected to grow at a constant rate of 6%per year indefinitely. If investors require a 12% return, what is the current market price of the share? 1. R 59,94 2. R106,40 3. R127,20 4. R135,89 Clear my choice Beckett has just purchased shares in a company that is expected to start paying dividends at the end of next year. Theexpected dividends for the next four years are as follows: D R5,42; D R5,87; D R6,36; and D R6,89. He expectsto sell the share for R69,96 at the end of the four-year period. If the required rate of return is 20%, what is the current value ofthe share? 1. R42,10 2. R44,60 3. R46,85 4. R49,33 Clear my choice 1 = 2 = 3 = 4 = Question 19 Not yet answered Marked out of 1.00 Question 20 Not yet answered Marked out of 1.00 Logan is considering buying shares in Informed Analysts. He expects the company to pay a dividend of R3 this year and R4next year. After that he expects the dividend to grow at a constant rate of 12%. If the required return for buying the companyshare is 15%, what would he pay for the share today? 1. R108,75 2. R118,55 3. R134,20 4. R149,33 Clear my choice Bandwidth Construction is about to pay its first dividends as follows: Year 1: R0,50 Year 2: R0,70 Year 3: R1,10 From year four onwards, the dividends will remain constant at R1,50 per share indefinitely. If investors require a return of 10%,what is the current value of the share? 1. R11,85 2. R12,40 3. R13,13 4. R14,75