Advanced Financial Management (FIN4801) - Unisa: FIN4801 Assign 1 2020

Advanced Financial Management (FIN4801) - Unisa: FIN4801 Assign 1 2020 You have R1000 which you want to save. A friend argues with you that banks are bound to fail, so you should keep the money in yo ur mattress. If inflation is expected to be positive in the medium term, would this be a good or bad idea if you wish to preserve buying power? Choose the most correct answer. A. It would be a good idea, the current crisis will lead to negative returns from banks. B. It would be a bad idea, inflation will erode the value of the money over time. C. It would be a bad idea as moths could get to the money. D. It would be a good idea as uncertainty is high. Reset Selection Mark for Review What's This? Question 2 of 23 1.0 Points Chickens Ltd is buying a new printer. The company has been given the deal to get a printer worth R2000 now for a deposit of R500, but only pay the remainder in 2 years’ time with no interest applicable, as a special deal. What would the present cost of the deal be if the applicable discount rate is 5%? A. R1361 B. R1370 C. R1500 D. R2000 Reset Selection Mark for Review What's This? Question 3 of 23 1.0 Points Futuretech Ltd. recently completed a project for a client which yielded a profit of R1 000 000. The company now has the opportunity to either invest the profits from the project or to take on a new project. The company can either undertake the development of new software for which it can sign a contract now to sell it for R1 500 000 in 3 years’ time. Alternatively, it can invest the money a money market account where it can earn 15% per year. Determine the value of the investment alternative and choose the most correct option below.A. R1000 000; it would be better to invest the proceeds. B. R1500 000, it would be better to develop the software. C. R1520 875, it would be better to invest the profits. D. R1594 874, it would be better to develop the software. Reset Selection Mark for Review What's This? Question 4 of 23 1.0 Points The business where you work had a sales pitch from a company automating some document handling processes at a cost of R500 000 per year for the next 5 years. It is estimated that doing so will save the company R2 000 000 in today’s terms. Assume a discount rate of 5% is applicable. Would it be worthwhile for the company to go for the automation process or retain its current practice? Choose the most correct option and explanation below. A. R2164 738, it would be worthwhile B. R2164 738, it would not be worthwhile C. R2500 000, it would not be worthwhile D. R4500 000, it would be worthwhile Reset Selection Mark for Review What's This? Question 5 of 23 1.0 Points If you paid R36 000 per year into a savings account that earns interest of 5.25% p/y, how much will be in the account after 20 years?  A. R720 000  B. R790 000  C. R1122 361 D. R1222 316 Reset Selection Mark for Review What's This? Question 6 of 23 1.0 Points A loaf of bread cost R5.00 at the start of 2000. At the end of 2020, it will cost R15.00 for the same bread. At what rate did the price of bread grow over the aforementioned period?