2.
3.
4.
5.
6.
Intention to create legal relations
Agreement (an offer and acceptance)
Consideration (the price)
Capacity of the parties
Consent that is genuine
Legality of objects
I Always Consider Chocolate Consumption Legal
If lacking,
make a
contract
How competent do you feel so far about the material
from topics 1 and 2?
b) Very Good
d) Struggle in some areas
c) OK
a) Completely
b) Very Good
b) Very Good
b) Very Good
b) Very Good
c) OK
b) Very Good
c) OK
b) Very Good
b) Very Good
b) Very Good
d) Stru
Question 1
1.5 out of 1.5 points
Given the data below, calculate the net present value of an infinite chain of
replacement using the equivalent annual value method. Assume the cost of capital
is 11% p.a.
Initial Outlay Year 1 Year 2 Year 3
-$10,000
$10,00
SOME INTERESTING FORMULAS
Present Value and FV of a Growing Annuity
PV 0=
[ ( )]
CF 1
1+ g
1
(r g)
1+r
[
n
n
n
(1+r ) ( 1+ g)
FV n=CF 1
rg
]
Of course once you have the PV it is easy to find the FV and vice versa.
FVn = PV (1+r)n and PV = FVn (1+r)-n
PV o
AYN456 BUSINESS
AND CORPORATIONS
LAW
Week 9 Additional resource for lecture
supplement
Who owes the duties?
At common law, directors and managers
are in a fiduciary relationship with the
company: Timber Engineering v
Anderson (1980, NSW)
Fiduciaries have
Question 1.
First we must solve for the annual nominal rate.
If ANR = Jm
i = effective rate
m = compounding periods
Jm = m x [(1 + i)1/m 1]
= 365 x [(1+.055)1/365 1]
= .0536
= 5.36%p.a
Monthly rate = .0536/12
= .00446667
i. Where P = Cost of house deposit
Project 2
Cost
Cost of Capital after tax
life
Salvage Value end of year
three
Depreciation - Straight Line
Rate 1/life in years
Depreciation - Diminishing
value rate (SLR * 2)
Gain on Sale
Book Value end year three
Working Capital Invested year
zero
Worki
Project 1
(1) The amount of the annual loan repayment and
repayment schedule
Loan =
n=
r=
Cost of capital
Repayment
$
1,500,000.00
5
7.15%
10.80%
$367,307
PV = $1,500,000 = R [1-(1.0715) -5/.071
$1,500,000 = R x 4.08378 therefore
$1,500,000/4.08378 = $367
Have you read the exam information in
detail and know what to focus on for
revision?
Yes, but have not had a great amount of time
yes
Yes, I read the exam information.
yes
Yes
yes
Yes
Yes, I have. This is how to work on Statemen
yes
yes
Yes
yes
Yes
Yes
Ye
1
QUESTION 1
Goochi Ltd manufactures a range of leather fashion accessories. The companys management
accountant is in the process of preparing a budget for one of its products, a leather mobile
phone cover, the iCover. Each unit requires 0.25m2 of leathe
AYN456 Practice Quiz week 6
1.
The parties draw up a document where a sale will take place, only
when a formal contract has been signed by all parties.
a.
This indicates that the contract is complete and the parties must draw up a
formal contract.
The con
iCover
Leather
Selling price
$
0.25 square metres
25.00
@
$
15.00 per metre
Closing inventory for finished goods = 25% of next month's sales
Closing inventory for raw material should be kept at 10% of the following month's production requirement
Sales est
Question 1
ANSWERS
First we must find the nominal rate
i (effective rate)
5.50%
m (compounding periods
365
j (nominal rate)
0.05354469
using formula
j (nominal rate)
0.05354469
using excel function
Cost
Deposit
Loan
725,000
40,000
685,000
Rate
Term
5.36%
Note that 2 columns can be used for subtotals
as below or 1 column only can be used.
AYN 416 Revision Questions Solutions
Fluid Ltd
Statement of Cash Flows
For the year ended 30 June 2016
Cash Flows from Operating Activities
Receipts from Customers1
Inter
Example One
What is the present value of an annuity of five payments of $3000, with the first
payment made now and the others at yearly intervals? The discount rate is 10% pa.
This is an annuity due. Sometimes called cash flows in advance
Year
Cash
Flow
0