Business Mathematics 2 (MGS312)
DIPET 1 in Economics - ECNT
Semester: First Semester
Level: 400
Year: 2017
Director: Dr_ Daniel A. Alcume, Associate Professor
Deputy Director: Dr. Thomas KANAA
'Secretary General: Dr. Onabid A. Mathias
Dean of Studies: Dr. Simon TATA NGENGE, Associate Professor
FIRST SEMESTER EXAMINATIONS
COURSE TITLE: BUSINESS MATHEMATICS H CODE: MGS303
Instructions — Answer ALL Questions, show working clearly Put answers to 2 decimal places
DATE: 2016/2017 Academic year TIME ALLOWED: 2 HOURS
Question one
DCF Ltd. is investing in an extension to one of its factories. The cost of construction now is 50,000,
30,000 will be invested in equipment in 12 months" time and a further 8,000 at the end of 2 years.
The management accountant estimates that the cash inflows will commence at the end of year 3 and
will continue as set out in the following schedule. The scrap value of the equipment at the end of
year 7 is 10,000.
Year 3 4 5 6 7
Cash inflow 30,000 30,000 30,000 20,000 20,000
The, cost of borrowing, is 10 percent p.a. All figures are in Millions of FRS. You
are required to;
a)
Calculate the Net Present Value and advise the company if it should proceed
b)
Outline the key advantages of the NPV technique over the Payback period technique for
evaluating in
-
vestment project.
Question two
a) Assume that a business wishes to buy a machine for 100,000 FRS which it expects to keep
for
4
years, before selling it at a scrap value of 20,000 FRS. Determine the yearly
depreciation percentage using the reducing balance method and hence prepare a depreciation schedule.
b) 100,000 frs is saved in account at the end of each month for 2 years. What is the total amount
in the account at the end of year 2 if interested is 12% p.a. compounded monthly.
Study the following data showing the output of maize in tons produced by DCF LTD;
Quarter/Years 2011 2012 2013 2014
Q1 16 14 18 24
Q2 18 26 32 34
Q3 14 20 24 26
Q5 22 24 28 34
a) Determine the four period moving averages
b) Determine the trend line using the deseasonalized data
GOOD LUCK!!!
REPUBLIC OF CAMEROON
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THE UNIVERSITY OF BAMENDA
HIGHER TECHNICAL TEACHER TRAINING
COLLEGE
DEPARTMENT OF ECONOMIC SCIENCES
P.O. BOX 39, BAMBILI
Tel : (+237) 33 15 64 19
REPUBLIQUE DU CAMEROUN
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UNIVERSITE DE BAMENDA
ECOLE NORMALE SUPERIEURE DE
L'ENSEIGNEMENT TECHNIQUE
DEPARTEMENT DES SCIENCES
ECONOMIQUES
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