Principles of Finance (FINA2202)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 200
Year: 2017
Hint: all the workings must appear on your answers
Question one; (10 marks)
Write a short note statement explaining the time value of money. (Your development must
not exceed ten lines)
Question two; (15 marks)
Write a short statement explaining three appraisals of the interest rate. (Your development
must not exceed 15 lines)
Question three; (10 marks)
You are to receive the following payment from your debtor during the upcoming years;
- 2018: CFAF908,000
- 2020: CFAF707,000
- 2023: CFAF166,560
- 2025: CFAF456,000
- 2028: CFAF346,000
In need of funds, the bank offers to surrogate all these payments in a single payment worth
today CFAF 1,485,650. Knowing the alternative discount rate offered by competitors is
13.6%, is the bank’s proposition worthwhile? You are expected to motivate your answer with
calculation.
Question four: (10 marks)
Mr. AMUNGWA’s customers have accepted to sign the bill of exchange relating to their
purchases on credit. Their features are as follows;
- PATIENCE; nominal value; CFAF237,780 and the due date; 14
th
August 2017
- GLEN; nominal value; CFAF733,700 and the due date; 17
th
November 2017
- AHMAD; nominal value; CFAF460,086 and the due date; 20
th
October 2017
On 17
th
July 2017, Mr. AMUNGWA in need of liquidity is offered by his bank to grant to
him some money based on these bills of exchange, given a discount rate of 16.20%.
Determine the net amount received by Mr. AMUNGWA
Question 5; (25 marks)
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2
nd
Semester C.A Course: Principles of Finance: FINA202
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
www.schoolfaqs.net
You intend to buy a plot of land within 8 years at CFAF 8,400,000. For this purpose, you are
offered an opportunity by your bank to regularly save a constant amount each year worth
CFAF 778,388. The sums deposited will yield interests calculated on a compounded basis.
1. How worth is the annual interest rate? (10 marks)
2. As you a worker remunerated, you agree with your bank manager to regularly save
but monthly. Determine corresponding payments to make to meet the required CFAF
8,400,000. (15 marks)
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