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    University of the West Indies construction accounting exam paper

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    COEM_6006_exam_2008

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    University of the West Indies construction accounting exam paper

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    © All Rights Reserved
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    13 views6 pages

    COEM 6006 Exam 2008

    Uploaded by

    Hanniel Madramootoo
    University of the West Indies construction accounting exam paper

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
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    Moz @& ‘THE UNIVERSITY OF THE WEST INDIES EXAMINATIONS OF DECEMBER 2008 Code and Name of Course: COPM 6006— CONSTRUCTION ACCOUNTING AND FINANCE Date and Tire: Ta 2! Decombas 200% - 4100 Duration: TWO HOURS INSTRUCTIONS TO CANDIDATES: This paperhas 6 agesand 4 questions ANSWER ALL QUESTIONS, EACH QUESTION CARRIES EQUAL MARKS PROVIDED PERT PROBABILITY TABLE 1. A contractor has three gangs, A, B and C, fully employed erecting formwork. Formwork is of two types: large panels and small panels. The erection of 20 square metres of large panels requires a contribution of one man-weck from gangs ‘Aand B, and five man-weeks from gang C. The erection of 20 square metres of ‘small panels requires a contribution of four man-weeks from gang A, one man- week from gang B and two man-weeks from gang C. Tn planning for future work it is assumed that for any given period of one week gang A has a capacity of six man-weeks, gang B two man-weeks and gang C four man-weeks. If the contractor makes a profit of $30 per square metre of large panels erected ‘and $40 per square metre of small panels, determine graphically what area of each type of panel would maximize the profit in any given week. Calculate the maximum profit. [15 marks] © The University of the West Indies Course Code COEM 6006 Page 2 2 Table Q2 presents details of a set of project activities. (Draw an_activity-on-arrow critical path network using the PERT methodology. [5 marks} Gi) Determine the minimum project duration and the critical path. [5 marks} (ii) Whatis the 75% probable project duration? [S marks} Ketivity Duration Gays) Depends on Activities a m b a 24 30 36 - B 3 10 1 = c 14 is_ | 18 | : D 8 10 i B E 16 18 20 B F 12 4 | _i7 D ¢ 12 14 16 A zal H 2 24 26 CD I 26 28 30 AEF J 10 12 15 G Table Q2 — Details of Project Activities 3, Am investor has spent $200,000 to acquire and renovate a student accommodation block and operates it for 8 years. The developer will receive annual payments of $25,000 at the end of each of the next 8 years, together with additional lump sums of $80,000 and $100,000 at the end of years 7 and 8 respectively. Assuming an interest rate of 12% per annum: (a) Tabulate the cash flow. (2 marks} (6) Calculate the Net Present Value. [3 marks} (©) Determine the Internal Rate of Return of the business venture. [10 marks} © The University of the West Indies ‘Course Code COEM 6006 2008)..seefseee Page 3 4.(a) Using the projected Profit and Loss Account and Balance Sheet, of a proposed highway materials production plant, (Figure Q4.2), calculate the break-even point. [8 marks] (b) Sct out the projected balance sheet at the end of year 0001, using the Profit and Loss Account of year 0001 (Figure Q4.b). Assume that the fixed assets are fully depreciated over ten years using the straight ine method, the creditors are 0.5% of tumover, the stocks in hand remain unchanged and the proposed dividend is $0.06 per share. [7 marks] © The University of the West Indies Course Code COEM 6006 2008..../ Page 4 Projected Profit-and-loss Account for the year ended 0001 ‘Tumover 950,000 less Materials 610,000 less Plant /fvel 125,000 tess Labourlvariables 25,000 equals Gross Margin 190,000 less Fixed 75,000 less Admin 10,000 less Depreciation 25,000 Operating Profit 80,000 plas Invest income 0 less Cost of finance 40,000 equals Gross Profit 40,000 less ‘Texation 12,000 equals. Net profit foryear 28,000 Figure QULA © The University of the West Indies Course Code COEM 6006 Page 5 ‘The Projected Balance sheet for the year beginning 0001 is shown below: ‘Authorised Capital 4 $ Fined Assets 4 minimum 100 ordinary shares at’ 600,000 Cost “depreciation Issued Capital Freehold land 170,000 170,000 ordinary shares at 21 folly paid 150,000 ‘Freehold Buildings 0 0 Revenue Reserves Plant and Machinery 223,000 0 223,000 General reserve 0 Fixtures and Fittings 3,000 0 3,000 Profitand Loss Account ° ‘Motor Cars 24,0000 24,000 ‘Total Shareholders Interests 150,000 420,000 Long Term Loan 300,000 Investments: 0 Deferred Taxation. ° (Quoted Market value) = aii Current Assets Capital Employed 450,000, ‘Stocks in Hand, Work in progress Current Liabilities and Sundry Debtors 5,000 Sundry Creditors ° Shor'-esm Deposits 0 ‘Current Taxation 0 ‘Cash at Bank 25,000 Proposed Dividend 0 450,000 FigureQ 4b, © The University of the West Indies Course Code COEM 6006 2008)... J... Page 6 & PERT Probability Table Probability|[2=deviation|[Probability| 0.00 “3.0+ 4.00 0.03 -2.0+ 0.98 0.07 15+ 0.93, 0.08 =1At 0.92 0.09 || -13+ || 0.00 | 0.11

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