Investment Opportunities: A person is looking for investment opportunities. He has about Rs.50 million.

Presently, he is concentrating on TWO PROJECTS: (1) Weaving Mills & (2) Oil Plant. Both projects require an investment of Rs.10 million each. Preliminary information indicates that while Oil Plant would give a constant return of Rs.3,300,000 per annum for the next four years, the income from weaving Plant would be as follows: Rs. 1 2 3 4 Weaving

1,000,000 1,500,000 3,000,000 9,000,000

Supposing no other information is available, except that the normal return on Investment from industrial projects are 12% per annum and both projects have same life, which project would be accepted.

12%
1 2 3 4 5 PVIF 0.8929 0.7972 0.7118 0.6355 0.5674 PVIFA 0.8929 1.6901 2.4018 3.0373 3.6048

PURCHASE BUDGET
Noon Pakistan Ltd is establishing a fruit processing plant at Bhalwal, Punjab. The project would be completed in the next couple of months. The manager wants to start negotiating with the farmers (the fruit suppliers ) well before the operation of the plant. In order to have an idea of the quantum of purchase during the initial months of operation, he seeks your advise. In other words, you would have to prepare a expected cash disbursement on account of raw material purchases. The following information is available: 1 Sales in the initial months are expected to be: Rs. April 72,500 May 66,000 June 60,000 July 50,000 2 Raw Materials constitute 60% of sales 3 All purchases are to be made on account 4 All purchases are made a month before the expected sale. 5 40% is to be paid on spot 6 The balance would be paid in the next two months in equal installments. Based on the above please prepare cash disbursement budget ( purchases ) for May and June

Bahria University is organizing one-day seminar at Hotel Sheraton, Karachi for senior executives of public-sector companies. The costs are expected to be : Rs. a) Handouts during sessions 200 per participant b) Hall Rental 21,000 c) Working Lunch 300 per participant d) Postage 1,091 e) No. of Instructors 5 f) Honorarium 3,000 per instructor g) Course Development 12,000 i) Takeaway folders & bags 1,500 for each participants k) Audio Visual 20,000 l) Contingencies of total 10% Each Participant is expected to pay a fee of Rs.6,000/REQUIRED: Prepare a budget if expected participants are 50 showing cash surplus or cash deficit. Can you workout a formula which can instantly give total budget for a given number of participants. If so, please provide the following No of participants Cash surplus / deficit 25 50 75 100 Please go back to question (a) and state that how far you can reduce the fee to just cover your costs.

a) b)

c)

Only hand-written, well-written and timely submitted assignments would carry good marks

d marks