ACC501 ASSIGNMENT NO. 1 FALL 2022 || 100% RIGHT SOLUTION || BUSINESS FINANCE || BY VuTech

ACC501 ASSIGNMENT NO. 1 FALL 2022

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ACC501 ASSIGNMENT NO. 1 FALL 2022 || 100% RIGHT SOLUTION || BUSINESS FINANCE || BY VuTech

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SEMESTER FALL 2022

BUSINESS FINANCE (ACC501)

ASSIGNMENT

DUE DATE: 16 DECEMBER, 2022

MARKS: 10

LEARNING OBJECTIVES:

After attempting this assignment whole-heartedly, the students will be able to:

·         Calculate Return on Equity and Sustainable Growth Rate.

·         Calculate Rate of Return on any investment.

 

Question # 1:                                                                                                  (05 Marks)

The ABC Limited, a manufacturer of wood furniture, has a debt-equity ratio of 0.4, a profit margin of 4 percent, a dividend payout ratio of 50 percent and a total assets turnover of 1. You are required to calculate the Sustainable Growth Rate.

 Solution:

Growth Rate = ROE x b / 1 - (ROE x b)

ROE = Profit Margin x Debt - Equity Ratio x Total Assets Turn Over Ratio

= 5.6%

= 5.6 x 0.5 / 1 - 5.6 x 0.5

= 0.056 x 0.5 / 1 - 0.056 x 0.5

= 2.8% ANS

Question # 2:                                                                                                  (05 Marks)

Mr. Ali is a salaried person and wants to buy a car after 6 years. At that time, he would be required to have an amount of Rs. 700,000 for the purpose. Currently, he has Rs. 300,000 to invest. He has found an investment plan that promises him to pay Rs. 700,000 after 6 years if he invests Rs. 300,000 now. You are required to calculate the interest rate offered by the investment plan?

 Solution:

Future Value V = PV x (1 + r)t

Put in above equation

700000 / 300000 = (1 +r)6

2.3 = (1 + r)6

(2.3)1/6 = (1 + r)

= 3.096 ANS

NOTE:

Complete calculations are required for every part of the questions. Incomplete calculations may result in loss of marks.

IMPORTANT:

24 hours extra / grace period after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience.

OTHER IMPORTANT INSTRUCTIONS:

DEADLINE:

·        Make sure to upload the solution file before the due date on VULMS.

·        Any submission made via email after the due date will not be accepted.

 

FORMATTING GUIDELINES:

·        Use the font style “Times New Roman” or “Arial” and font size “12”.

·        It is advised to compose your document in MS-Word format.

·        You may also compose your assignment in Open Office format.

·        Use black and blue font colors only.

 

RULES FOR MARKING

Please note that your assignment will not be graded or graded as Zero (0), if:

·        It is submitted after the due date.

·        The file you uploaded does not open or is corrupt.

·        It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc.

·        It is cheated or copied from other students, internet, books, journals etc.

Note related to load shedding: Please be proactive

Dear students!

As you know that Pre Mid-Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.