A) Find the present value of Rs.

500000 to be received at the end of 5 years at

12% interest compounded quarterly?
B) What is the present value of a 7 years annuity of Rs. 10000 at 10% interest?
C) Asha ltd. Is considering two mutually exclusive machine both require an initial
outlay of rs. 100000 each and have a life of 5 years . the company required
rate of returns is 12% and tax 40%. The projects will be depreciated on a
straight line basis. The net cash flow before taxes are expected to be
generated by the projects as followsYear
Machine A
Machine B
1
50000
65000
2
50000
40000
3
50000
25000
4
50000
60000
5
50000
60000
Calculate and state which machine should be purchased and why?
a) Payback period b) payback profitability c) profitability index d) NPV e) ARR
D) Rahul recently forecasted three economic conditions which he believes are
likely to occur with the given probabilities. Based on these conditions, an
analyst made the following forecast of returns on stock P,Q,R.
Economic
Probabiliti P
Q
conditions
es
Boom
0.30
10
12
Normal
0.50
20
16
recession
0.20
22
14
Calculate the average return and standard deviation of stocks
advise which stock is preferable for investment?

R
14
18
14
P, Q, R and

e) in January 2010, Mr. Varun purchased the following five companies shares:
Company
Number of shares
Purchased price
A Ltd.
100
200
B Ltd.
100
220
C Ltd.
100
150
D Ltd.
100
170
E Ltd.
100
130
He paid brokerage of Rs. 5000. During the year 2010, Mr. varun received the
following:
Company
Dividend
Bonus
A Ltd.
500
B Ltd.
700
C Ltd.
900
1:2
D Ltd.
400
E Ltd.
500
In January, 2011 Mr. Varun sold all his holdings at the following prices
Company
Sold
A Ltd.
300
B Ltd.
350
C Ltd.
280
D Ltd.
330

E Ltd.
300
He paid the brokerage af 6500. Calculate holding period returns?