Moore Construction Company plans to raise $650,000 over a 2-year period so they can purchase a piece of real estate. In order to obtain this amount, the company has decided to make quarterly investments into a sinking fund that will earn 8% per year compounded quarterly for the next 2 years. Using the sinking fund table, calculate the amount of each quarterly sinking fund payment required to raise $650,000 in 2 years.$

Moore, an investment property company, has been constructing a new cinema building for the last 18 months. At 31 December 20X7, the cinema was nearing completion, and the costs incurred to date were:$mMaterials, labour and sub-contractors 14.8Other directly attributable overheads 2.5Interest on borrowings 1.3The building is deemed to be a qualifying asset and therefore any borrowing costs are capitalised as part of the cost of the building. A specific loan of $18million was obtained to fund this project and the annual rate of interest rate is 9.5%.During the three months to 31 March 20X8 the project was completed, with the following additional costs incurred:$mMaterials, labour and sub-contractors 1.7Other directly attributable overheads 0.3The company was not able to determine the fair value of the property reliably during the construction period and so used the allowance within IAS 40 Investment Property to measure at cost until construction was complete.On 31 March 20X8, the company obtained a professional appraisal of the cinema’s fair value, and the valuer concluded that it was worth $24 million. The fee for his appraisal was $100,000, and has not been included in the above figures for costs incurred during the three months.The cinema was taken by a national multiplex chain on an operating lease as at 1 April 20X8, and was immediately welcoming capacity crowds. The lease agreement allows for annual revisions, and it was therefore clear that it was worth even more than the valuation at 31 March 20X8. Following a complete valuation of the company’s investment properties at 31 December 20X8, the fair value of the cinema was established at $28 million.Required:Set out the accounting entries in respect of the cinema complex for the year ended 31 December 20X8.

Jill Gates wishes to establish a perpetual scholarship fund at the Business School with the first annual scholarship to be paid in one year. The amount of the scholarship will initially be $40,000 but will then increase by 3% p.a. in line with expected inflation. How much is required to establish the fund if it is invested at 5.5% p.a.?

An investment promises to pay you $8,500 per year starting in 5 years. The cash flow from the investment is expected to increase by 3% per year forever. If alternative investments of similar risk earn a return of 6% per year, determine the maximum you would be willing to pay for this investment today. Enter your response below (rounded to 2 decimal places).

Question 3 (7 marks)The residents’ association of a retirement village needs $275 000 to upgrade the village’s facilities.The association obtains a 5-year, interest-only loan for $275 000 that charges a flat interest rate of5.2% per annum.(a) Calculate the quarterly interest payment for the interest-only loan.(1 mark)In order to repay the loan, the association sets up a sinking fund and plans to make monthlypayments of $4116.44 over the 5 years. The sinking fund earns interest at a rate of 4.3% per annum,compounded monthly.(b) Calculate the total cost of the interest-only loan and the sinking fund.(2 marks)(c) (i) Calculate the value of the sinking fund at the end of the first year.(2 marks)(ii) Calculate how much interest the sinking fund will earn in the first year.(1 mark)page 7 of 23 PLEASE TURN OVER(iii) State why the association could expect the sinking fund to earn more interest in the secondyear than in the first year.

Question 3 (7 marks)The residents’ association of a retirement village needs $275 000 to upgrade the village’s facilities.The association obtains a 5-year, interest-only loan for $275 000 that charges a flat interest rate of5.2% per annum.(a) Calculate the quarterly interest payment for the interest-only loan.(1 mark)In order to repay the loan, the association sets up a sinking fund and plans to make monthlypayments of $4116.44 over the 5 years. The sinking fund earns interest at a rate of 4.3% per annum,compounded monthly.(b) Calculate the total cost of the interest-only loan and the sinking fund.(2 marks)(c) (i) Calculate the value of the sinking fund at the end of the first year.(2 marks)(ii) Calculate how much interest the sinking fund will earn in the first year.(1 mark)