Seat No: Student No:

Exam Version No: X

(Do NOT write your name anywhere on this exam booklet)

Important

Do NOT detach any pages (EXCLUDING the formula sheet) from this booklet. Exam
booklets with missing pages and/or missing answer sheet will NOT be marked.

SUBJECT NUMBER FNCE 10002

SUBJECT NAME PRINCIPLES OF FINANCE
MID SEMESTER EXAM
SEMESTER 2, 2018
EXAM DURATION 60 minutes
READING TIME NONE
NUMBER OF PAGES YY (including the cover page and formula sheet)
AUTHORIZED MATERIALS
1. This is a CLOSED BOOK exam. Students should NOT have any books, notes or similar materials
in their possession.
2. The only calculator permitted for use in exams is the Casio FX82 (any suffix).
3. Foreign language dictionaries are NOT permitted.
INSTRUCTIONS TO INVIGILATORS
1. Students should be provided with this exam booklet and a multiple choice answer sheet (MCAS –
M1).
2. This exam booklet and the MCAS – M1 answer sheet MUST be collected at the end of the exam.
INSTRUCTIONS TO STUDENTS
1. Complete the multiple choice answer sheet (MCAS – M1) as follows:
 Enter your Student Number on the right side of the answer sheet.
 Enter your subject code and Surname in the space provided on the answer sheet.
2. Complete the seat number and student number on the front page of this exam booklet
3. Do NOT detach any pages (EXCLUDING the formula sheet) from this booklet.
4. All questions are equally weighted. Attempt all questions.
5. Only start writing when instructed.
6. You may use this booklet for rough work. Your calculations will NOT be marked.
7. Enter your answer to each question on the provided M1 as a, b, c, d or e.
8. This booklet MUST be collected at the end of the exam.
9. Exam booklets with missing pages or missing or incomplete MCAS – M1 will NOT be
marked.

1
 FORMULAE SHEET FOR FNCE10002 MST EXAM – SEMESTER TWO 2018

Fn = P0 (1+ r)n P0 = Fn / (1+r)n

P0(OA) = (C/r) [ 1- 1/(1+r)n ] re = (1 + r/m)m - 1

P0(DA) = {(C/r) [ 1- 1/(1+r)n ]}/ (1 + r) n Fn(OA) = (C/r)[(1+r) n – 1]

P0 = [C/r]
P0 = C(1+g)/(r-g)

P0 (AD) = C + [C / r][(1 - (1 + r)-(n-1)] P0 = [C/r]/(1 + r) n

 
P0 =  I kd  1  (1  kd ) n  Pn (1  kd )n Fn-1 (AD) = {C + [C / r][(1 - (1 + r)-(n-1)]}[1 + r ]n-1

P0  Dt
 Pt 1 
E1 k e  g ke  g
E
Fn = P0 (1+ n*r) P0  1  PVGO
ke
 FaceValue   365 
Annualized Cost of BAB    1   P0 = D0 (1+g) / (ke - g)
 P0  Costs  n 
P0 = Fn /[1 + (n/365)  r]
P0 = Fn / [ 1+ (d/365) r]
n
Ct
NPV    C0 P0 = DP / k P
t 1 1  k  t

D0 (1  g ) n
Ct
ke 
P0
g  1  r 
t 1
t
 C0  0 

1 Nominal Rate C1 C2 Cn F
Real rate  1 D   
1  Inflation Rate 1  k d 1  k d 2
1  kd  1  kd n
n

Average annual earnings 100 Average annual earnings 100

ra   % ra   %
Initial investment in a project 1 Average investment in a project 1

Net cash flow before tax = CI - CO Company Tax Payable = tC (CI – CO – D)

Net Cash flow after tax = (CI-CO)(1-tC) + tCD