ABM 56 (Financial Management) Final Exam - SY 2012-2013 - 1st Semester

ABM 56

FINANCIAL MANAGEMENT

FINAL EXAM

Name: __________________________                                Date: _________________

Course/Section:___________________                               Score: ________________

1. Projected Income Statement on Quail Production                                                                                    

Note:    Initial Capital                    :       Php1,700,000.00

            Opportunity Cost of Investment :           18% per annum

2. Income Statement of Range Chicken Project

Continuation…..                                                                                                                                                                                                                                                                                                                                    

Note:    Initial Capital                    :       Php1,500,000.00

            Opportunity Cost of Investment :           18% per annum

 Required:

1.      How much the total interest expenses in each project using an equal installment payment of amortization considering that the initial capital will be loaned to the Land Bank of the Philippines with an interest rate of 9% for quail and 12% for ranged chicken, payable within 4 years? (20 points)

2. Compare the following financial indicators of the two projects (30 points):

                        a. Return on Investment (ROI)

     b. Payback Period

                        c. Profitability Index

                        d. Benefit-cost Ratio

                        e. Net Present Value

                        f. Internal Rate of Return (IRR)

3. What if the costs will inflate to 3%? Is the two projects can still be profitable and bankable? How much the change of financial indicators? (15 points)

4. What if the revenues will deflate to 3%? Is the two projects can still be profitable and bankable? How much the change of financial indicators? (15 points)

5. What if the revenues will deflate to 2% and costs will inflate to 3%? Is the two projects can still be profitable and bankable? How much the change of financial indicators? (15 points)

          6.  Make your conclusions and recommendation for the most profitable project. (10 points)

 Note: Deadline for submission of papers must no later than Friday 19, 2012. No extension given.