Principles of Finance (FINA2202)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 200
Year: 2016
Instructions: answer all questions
Duration: 3 hours
Q1: (10MARKS)
Write a short statement on the importance of financiers in an organization.
(your development must not exceed 25 lines)
Q2: (15 marks)
Write a short statement explaining three appraisals of the interest rate. (your
development must not exceed 15 lines)
Q3: (10 marks)
You are to receive the following payments from your debtor during the
upcoming years:
-2018: CFAF908,000
-2020: CFAF707,000
-2023: CFAF166,560
-2025: CFAF456,000
-2029: CFAF346,000
In need of funds, the bank offers to surrogate all these payments in a single
payment worth today CFAF1,430,000. knowing the discount rate is 13.6%, is
the bank’s proposition worthwhile? you are expected to motivate your
answers with calculation.
Q4: (10 marks)
Mr. ROLAND’s customers have accepted to sign the bill of exchange relating
to their purchases on credit. Their features are follows:
-PATIENCE: nominal value: CFAF457,700 and the due date: 14
th
August
2016;
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2nd Semester Exam Course : Principles of Finance
Course Code: FINA202
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-GWEN: nominal value: CFAF733,700 and the due date: 17
th
November
2016;
-ALI: nominal value: CFAF560,086 and the due date: 20
th
October 2016;
On the 20
th
of July 2016, Mr. ROLAND in need of liquidity, is offered by his
bank to grant him some money based on these bills of exchange, given a
discount rate of 14.80%, determine the net amount received by Mr. ROLAND
Q5: (25 marks)
You intend to buy a plot of land within 10 years at CFAF 12,400,000. For this
purpose, you are offered an opportunity by your bank to regularly save a
constant amount each year. The sums deposited will yield interest worth 9.5%
per year calculated on a compounded basis
1. How much are your savings worth per year? (10marks)
2. A competitive bank offered a similar saving plan but with yearly deposits
worth CFAF 1,805,506. Determine the corresponding interest rate. (15
marks)
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