1.2 QUANTITATIVE TOOLS IN BUSINESS ASSIGNMENT 4 Question one Dodoo Ltd. has decided to set up a sinking fund to replace an asset in 6 years’ time. The value of the fund after 6 years will be GHS 80,000 and the fund is expected to earn interest at the rate of 8% per annum. The asset to be replaced has been bought for GHS 55,000 and it is to be depreciated on a straight-line basis with scrap value of GHS 7,000. Required: What must the annual payment into the fund, commencing one year from now, with a final payment at year 6 What must the annual payment into the fund, commencing now, with a final payment at year 6 Prepare a schedule showing the WDV of the existing assets and the growth of the fund
1.2 QUANTITATIVE TOOLS IN BUSINESS ASSIGNMENT 4 Question one Dodoo Ltd. has decided to set up a sinking fund to replace an asset in 6 years’ time. The value of the fund after 6 years will be GHS 80,000 and the fund is expected to earn interest at the rate of 8% per annum. The asset to be replaced has been bought for GHS 55,000 and it is to be depreciated on a straight-line basis with scrap value of GHS 7,000. Required: What must the annual payment into the fund, commencing one year from now, with a final payment at year 6 What must the annual payment into the fund, commencing now, with a final payment at year 6 Prepare a schedule showing the WDV of the existing assets and the growth of the fund
Assignment-Set-4-May-2018.docx