WESTMINSTER BUSINESS SCHOOL

ONLINE TIMED ASSESSMENT SEMESTER 1 2020 - 2021

Module Code: 4ACCN005W

Module Title: Quantitative Methods for Accountants
Module Leader: Talal Kadhim
Release Time: 12/01/2021 14:00 (GMT)
Submission Deadline: 13/01/2021 14:00 (GMT)

Instructions to Candidates:

Please read the instructions below before starting the paper

• Module specific information is provided below by the Module Leader

• The Module Leader will be available in the first hour of timed release to respond to any queries
via a discussion board on blackboard

• As you will have access to resources to complete your assessment any content you use from
external source materials will need to be referenced correctly. Whenever you directly quote,
paraphrase, or summarise someone else’s ideas, you have a responsibility to give due credit to
that person for their work. Support can be found at
https://www.westminster.ac.uk/current-students/studies/study-skills-and-training/research-
skills/referencing-your-work

• This is an individual piece of work so do not collude with others on your answers as this is an
academic offence.

• Plagiarism detection software will be in use

• Where the University believes that academic misconduct has taken place the University will
investigate the case and apply academic penalties as published in Section 10 Academic
Misconduct regulations.

• Once completed please submit your paper via the submission link provided. You should
only submit once. If, in cases of technical difficulties, you submit more than once the
second document uploaded will be accepted and marked as your final submission.

• Work submitted after the deadline will not be marked and will automatically be given a
mark of zero

• If you are submitting a Turnitin assignment, please see this web page for guidance. If you are
submitting a Blackboard Assignment, please see this web page for guidance.

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Module Specific Information

• This is a CLOSED book exam.

• Answer Any Five Questions

• The use of calculators IS permitted.

• Show All your calculations on Microsoft word documents.

• Formula sheet, NPV table, Annuity table and Standard normal distribution are
at the end of the paper.

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Answer any five questions

Question 1

A company buys four products with the following characteristics.

Number of units bought Price paid per unit

Items year1 year2 year3 year1 year2 year3
A 20 24 26 10 11 13
B 55 51 53 23 25 26
C 63 84 86 17 17 18
D 28 34 37 19 20 23

1.1) Find Laspeyre’s index for year 2 using year 1 as the base year. (10 marks)
1.2) Find paasche index for year 2 as current year using year 1 as the base year
(10 marks)
(Total: 20 marks)
Question 2

a) Without calculating any values, explain which option you would prefer:
£500 that has been invested for 3 years at 6% interest payable annually or £500
that has been invested for 3 years, where every 6 months 3% interest is added
to the account?
(1 mark)

b)
I. Calculate the value at the end of the tenth year of £5000 invested at an annual
rate of interest 10%. (5 marks)
II. Calculate the value at the end of the third year of £30000 invested at an annual
rate of 8%. (5 marks)
III. Calculate the value at the end of the fifth year of £500 invested at an annual rate
of 10% compounded monthly (2 marks) and the effective annual rate in this case (3
marks).

IV. Calculate the value at the end of the fourth year of £800 invested at a nominal
rate of 7% compounded quarterly (2 marks) and the effective annual rate in this
case (3 marks).
(Total: 20 marks)

Questions continue on the next page

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Question 3

An investor has a maximum of £30,000 to deploy, and has the following available
options:
Investment A Investment B Investment C
Initial Outlay 28 28 24
Yearly Inflow Year1 0 14 20
Year2 12 14 16
Year3 16 14 10

The investor estimates a constant rate of interest of 5% throughout the next 3 years.
Required:
3.1) Using the Net Present Value, evaluate which investment she should choose.
(10 marks)
3.2) Using the Payback periods, evaluate which investment she should choose.
(10 marks)
(Total: 20 marks)

Question 4

a) A satellite TV store has newly opened for business and is open just four days a
week –Monday, Wednesday, Friday and Saturday. The number of satellite TV orders
each day during the first 3 weeks of business is shown below.
Week 1 Week 2 Week 3
M W F S M W F S M W F S
3 5 7 8 3 6 9 10 4 7 11 13

Required:
Taking a moving average over a period of four days, calculate the centered moving
average.
(13 marks)

b) Each day a tool hire shop uses exponential forecasting with a smoothing constant
of 0.4 to forecast the demand for diamond drills the following day. An incomplete table
of the calculations for four days is given below:
Day Drills Forecast
1 39
2 28 F2=39
3 42 F3=?
4 45 F4=?
F5=?
Notice that they have started the forecasts by setting F2=X1.

Required: Calculate F3, F4 and F5. (7 marks)

(Total: 20 marks)

Questions continue on the next page

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Question 5

(a) The value of a car depreciates by 25% in a year. What will a car, currently priced at
$43 000, be worth in a year’s time? (7 marks)
(b) After a 15% reduction in a sale, the price of a good is $39.95. What was the price
before the sale began? (7 marks)
(c) The number of passengers using a rail link fell from 190 205 to 174 989. Find the

percentage decrease. (6 marks)

(Total: 20 marks)

Question 6

6.1 With a single die, what is the probability of scoring:

a) 6 (2 marks)

b) an even number (2 marks)

c) a number dividable by 3 (2 marks)

d) 0 ? (2 marks)

6.2 Three coins are tossed. List all the possibilities and use them to find:

a) the number of possible outcomes, (2 marks)

b) Probability of 3 heads, (2 marks)

c) probability of 2 heads, (2 marks)

d) probability of 1 heads, (2 marks)

e) probability of 0 heads, (2 marks)

f) the sum of all the probabilities found. (2 marks)

(Total: 20 marks)

Question 7 is on the next page

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Question 7

7.1 Solve the system of equations

3x + 2y = 1
−2x + y = 2 (4 marks)
7.2. Solve the equations
4x + y + 3z = 8
−2x + 5y + z = 4
3x + 2y + 4z = 9 (4 marks)

7.3 . Solve (x + 4)2 = 81 (4 marks)

7.4 Given the following data, find the range and mean to 3 decimal places:
9, 25, 16, 32, 5, 8, 12, 17, 15, 9 (4 marks)
7.5 Given the following values of x calculate the standard deviation to one decimal
place:
6, 4, 17, 23, 11, 4, 4, 2, 7, 2 (4 marks)

(Total: 20 marks)

END OF ONLINE TIMED ASSESSMENT

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 FORMULA SHEET
Forecasting
Ft = Ft-1 +α (Xt-1 – Ft-1)

Interest rate

Compounded yearly S= P(1+ r )n

Where: r =interest rate , n = number of years, S= sum , P = principle.

Compounded periodically S = P (1+ r/x)xn ,

Where: x = period, r =interest rate, n = number of years, S= sum, P = principle

The effective rate = (1+r/x)x - 1

, Where: x = period, r =interest rate

Average = (∑xi)/n, Standard Deviation σ =

Index Number

Laspeyre's price index = ([Σpnq0] / [Σp0q0]) x 100

Paasche price index = ([Σpnqn] / [Σp0qn]) x 100

Regression and Correlation

r=

Y=a+bx

b= , a= y̅ - b X̅ a= –b

Normal Distribution

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 Present Value Table
Present value of an individual cash flow of £1.Calculated by using the formula 1/(1 +r)n

Where: r = discount rate; n = number of periods

Periods Discount rates (r)

(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909
2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826
3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751
4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683
5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621
6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564
7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513
8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467
9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.414
10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386
11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350
12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319
13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290
14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263
15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239

(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%
1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833
2 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694
3 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579
4 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482
5 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402
6 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335
7 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279
8 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233
9 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194
10 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162
11 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135
12 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112
13 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093
14 0.232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078
15 0.209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065

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 Annuity Table

Present value of an annuity of £1. i.e. a series of identical cash flows. Calculated by
using the formula 1- (1 + r)-n
r

Periods Discount rates (r)

(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909
2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736
3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487
4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170
5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791
6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355
7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868
8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335
9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759
10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145
11 10.37 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495
12 11.26 10.58 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814
13 12.13 11.35 10.63 9.986 9.394 8.853 8.358 7.904 7.487 7.103
14 13.00 12.11 11.30 10.56 9.899 9.295 8.745 8.244 7.786 7.367
15 13.87 12.85 11.94 11.12 10.38 9.712 9.108 8.559 8.061 7.606

(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%

1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833
2 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 1.528
3 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106
4 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589
5 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991
6 4.231 4.111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326
7 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605
8 5.146 4.968 4.799 4.639 4.487 4.344 4.207 4.078 3.954 3.837
9 5.537 5.328 5.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031
10 5.889 5.650 5.426 5.216 5.019 4.833 4.659 4.494 4.339 4.192
11 6.207 5.938 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327
12 6.492 6.194 5.918 5.660 5.421 5.197 4.988 4.793 4.611 4.439
13 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533
14 6.982 6.628 6.302 6.002 5.724 5.468 5.229 5.008 4.802 4.611
15 7.191 6.811 6.462 6.142 5.847 5.575 5.324 5.092 4.876 4.675

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 Table of the standard normal distribution values (z ≤ 0)

−z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09

0.0 0.50000 0.49601 0.49202 0.48803 0.48405 0.48006 0.47608 0.47210 0.46812 0.46414
0.1 0.46017 0.45621 0.45224 0.44828 0.44433 0.44038 0.43644 0.43251 0.42858 0.42466
0.2 0.42074 0.41683 0.41294 0.40905 0.40517 0.40129 0.39743 0.39358 0.38974 0.38591
0.3 0.38209 0.37828 0.37448 0.37070 0.36693 0.36317 0.35942 0.35569 0.35197 0.34827
0.4 0.34458 0.34090 0.33724 0.33360 0.32997 0.32636 0.32276 0.31918 0.31561 0.31207
0.5 0.30854 0.30503 0.30153 0.29806 0.29460 0.29116 0.28774 0.28434 0.28096 0.27760
0.6 0.27425 0.27093 0.26763 0.26435 0.26109 0.25785 0.25463 0.25143 0.24825 0.24510
0.7 0.24196 0.23885 0.23576 0.23270 0.22965 0.22663 0.22363 0.22065 0.21770 0.21476
0.8 0.21186 0.20897 0.20611 0.20327 0.20045 0.19766 0.19489 0.19215 0.18943 0.18673
0.9 0.18406 0.18141 0.17879 0.17619 0.17361 0.17106 0.16853 0.16602 0.16354 0.16109
1.0 0.15866 0.15625 0.15386 0.15151 0.14917 0.14686 0.14457 0.14231 0.14007 0.13786
1.1 0.13567 0.13350 0.13136 0.12924 0.12714 0.12507 0.12302 0.12100 0.11900 0.11702
1.2 0.11507 0.11314 0.11123 0.10935 0.10749 0.10565 0.10384 0.10204 0.10027 0.09853
1.3 0.09680 0.09510 0.09342 0.09176 0.09012 0.08851 0.08692 0.08534 0.08379 0.08226
1.4 0.08076 0.07927 0.07780 0.07636 0.07493 0.07353 0.07215 0.07078 0.06944 0.06811
1.5 0.06681 0.06552 0.06426 0.06301 0.06178 0.06057 0.05938 0.05821 0.05705 0.05592
1.6 0.05480 0.05370 0.05262 0.05155 0.05050 0.04947 0.04846 0.04746 0.04648 0.04551
1.7 0.04457 0.04363 0.04272 0.04182 0.04093 0.04006 0.03920 0.03836 0.03754 0.03673
1.8 0.03593 0.03515 0.03438 0.03363 0.03288 0.03216 0.03144 0.03074 0.03005 0.02938
1.9 0.02872 0.02807 0.02743 0.02680 0.02619 0.02559 0.02500 0.02442 0.02385 0.02330
2.0 0.02275 0.02222 0.02169 0.02118 0.02068 0.02018 0.01970 0.01923 0.01876 0.01831
2.1 0.01786 0.01743 0.01700 0.01659 0.01618 0.01578 0.01539 0.01500 0.01463 0.01426
2.2 0.01390 0.01355 0.01321 0.01287 0.01255 0.01222 0.01191 0.01160 0.01130 0.01101
2.3 0.01072 0.01044 0.01017 0.00990 0.00964 0.00939 0.00914 0.00889 0.00866 0.00842
2.4 0.00820 0.00798 0.00776 0.00755 0.00734 0.00714 0.00695 0.00676 0.00657 0.00639
2.5 0.00621 0.00604 0.00587 0.00570 0.00554 0.00539 0.00523 0.00509 0.00494 0.00480
2.6 0.00466 0.00453 0.00440 0.00427 0.00415 0.00403 0.00391 0.00379 0.00368 0.00357
2.7 0.00347 0.00336 0.00326 0.00317 0.00307 0.00298 0.00289 0.00280 0.00272 0.00264
2.8 0.00256 0.00248 0.00240 0.00233 0.00226 0.00219 0.00212 0.00205 0.00199 0.00193
2.9 0.00187 0.00181 0.00175 0.00170 0.00164 0.00159 0.00154 0.00149 0.00144 0.00140
3.0 0.00135 0.00131 0.00126 0.00122 0.00118 0.00114 0.00111 0.00107 0.00104 0.00100
3.1 0.00097 0.00094 0.00090 0.00087 0.00085 0.00082 0.00079 0.00076 0.00074 0.00071
3.2 0.00069 0.00066 0.00064 0.00062 0.00060 0.00058 0.00056 0.00054 0.00052 0.00050
3.3 0.00048 0.00047 0.00045 0.00043 0.00042 0.00040 0.00039 0.00038 0.00036 0.00035
3.4 0.00034 0.00033 0.00031 0.00030 0.00029 0.00028 0.00027 0.00026 0.00025 0.00024
3.5 0.00023 0.00022 0.00022 0.00021 0.00020 0.00019 0.00019 0.00018 0.00017 0.00017

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