## ACC501 - Business Finance

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What is WACC? (3 Marks)

What re the primary shortcoming of the Payback Period (3 Marks)

Difference between Temporary Currents assets and permanent Current assets
(5 Marks)

One is about market value and book value (5 marks)

In one find the NPV of given data which I don’t remember (5 marks)

10 marks

(i) Calculate the Payback Period for each project.
(ii) Calculate the Net Present Value (NPV) of each project.
3
4

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10 Marks Question

Book Example

For example, the terms of 2/10, net 30 may be quoted for a certain customer.
– This means that the customer has 30 days from invoice date to pay the full
amount.
– If payment is made within 10 days, a 2% discount can be taken
• A buyer places an order for \$1,000 under the terms 2/10, net 60. He has the option of
– paying \$1,000 x (1 - .02) = \$980 in 10 days, or
– paying the full \$1,000 in 60 days.
• In general, the credit terms are interpreted as:
(take this discount off the invoice price)/(if you pay in this many days ), (else pay the
full amount in this many days)