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RMIT
FINAL EXAMINATION
EXAMINATION DETAILS
Course code:
BAFI1008
Course name:
Business Finance
Date of exam
:
7
th
June 2007
Time of exam
:
145
Duration of exam
:
3 hours and 15 minutes including reading time
Total no. of pages (incl. cover sheet):14
ALLOWABLE MATERIALS AND INSTRUCTIONS TO CANDIDATES
:
1.
The examination paper will be marked out of 100 but will represent 70% of
the assessment in this subject.
2.
This paper is divided into three sections: Section A 30 marks
Section B 40 marks
Section C 30 marks
3.
Students should allocate 1.8 minutes per mark
4.
You must enter your answers for Section A, the Multiple Choice Section, in
the Examination paper itself, and therefore the complete examination paper
MUST be handed in at the end of the examination together with your exam
answer books. No pages from the examination paper can be removed from the
examination paper
5.
You are required to only undertake eight (8) questions from Section B and
three (3) questions from Section C. Make sure on the front cover of the exam
book you indicate the questions that you have chosen to do from sections B
and C
6.
The use of a calculator is permitted, however, accompanying instruction
manuals must not be brought into the examination room.
7.
In questions where calculations are required students are only required to
calculate their answer to two decimal places.
8.
For the numerical questions students will be allocated marks for the correct
workings even if student’s final numerical answer is wrong.
9.
A formula sheet is included with this paper.
10. Students must underline their family name on the exam answer book
11. You must return the entire examination question paper together with your
answer books
1
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View Full Document SECTION B
Students are required to answer 8 of the below 14 question. The section counts
for a total of 40 of the 100 marks available on the exam paper and each of the
questions counts for 5 marks.
Question 1
Explain in simply terms what you would need to know and how you would go about
determining the interest and principal components of a loan repayment.
Question 2
Five years ago Chris entered into a loan agreement to borrow $200,000, and repay
the loan over 20 years through equal monthly instalments. If the interest rate was
fixed at 8% p.a. for the entire term of the loan, what is the amount of each monthly
instalment:
Question 3
Club Auto Parts’ last dividend, D
0
was $0.50, and the company expects to experience
no growth for the next 2 years. However, Club will grow at an annual rate of 5% in
the third and fourth years, and, beginning with the fifth year, it should attain a 10%
growth rate which it will sustain thereafter. Club has required rate of return of 12%.
Calculate the value of the stock today.
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This note was uploaded on 04/24/2011 for the course BAFI 1012 taught by Professor Michaelgangemi during the Three '10 term at Royal Melbourne Institute of Technology.
 Three '10
 MichaelGangemi

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