"Question 1Under company xFor investment x112 In phase 1 amount =65000 + (65000× ) = 72800100 0.09730In phase 2 Amount = 72800 (1 + ) = 87155.49365 0.14 36 In phase 3 Amount =87155.49 (1+ ) = 132325.2212 0.04 16 In phase 4 Amount =132325.22 (1+ ) =155161.724 For investment x2104 0.16 4100{ 1+ -1} 26 Amount = =594804.790.16 26 Total amount under company x =594804.79+155161.72 = 749966.51Under company YFor Investment Y 10.12 12In Phase 1 Amount = 27800 (1+ ) =39636.154 8 In phase 2 Amount =39636.15 + (39636.15 × ×2) = 45978100 0.14 4In phase 3 Amount = 45978 (1+ ) = 60267.7823 In phase 4 Amount = 60267.78 (1+0.09) = 78048.52For Investment Y2 36 0.06 17000 { 1+ -1} 12 Amount = = 668713.780.06 12 Total Amount for company Y is 668713.78 +78048.52 = $746762.3I would accept the package for company X since it is higher by $3204.21Question 2Inventory turnover =cost of goods sold÷average inventory2016 is 464121÷11494=40.382015 is 481325÷11087=43.42014 is 537779÷10919=49.252013 is 628795÷10751=58.49The inventory turnover ratio reduces over the years this could be an indicator that of an increasein inventory or reduction in cost of goods .This means that we are selling same amount goods butholding more goods as inventory than we previously were thus less inventory efficiency.Receivables turnover=net revenue÷Average receivables2016 is95483÷128075=0.746 2015 is77368÷123543=0.6262014 is146277÷121671=1.2022013 is-67924÷119799=-0.567During the year 2014 there is a high receivables turnover showing that cash is collected morequickly for use by the company. However after that the turnover is low could be an indicator of astruggle by customers to pay their bills.Asset turnover=net revenue ÷ average total assets2016 is95483÷1174022.5=0.08132015 is77368÷1132481=0.06832014 is146277÷1115321=0.13122013 is-67924÷1098161=-0.619In the year 2013 there is inefficiency by the company in utilization of its assets or the companycould have engaged in a capital intensive project.In the years 2014 and 2015 asset turnoverreduces signaling a decline in efficiency in asset utilization.Current ratio =current assets ÷ current liabilities2016 is 594484÷ 563790=1.0542015 is 564761÷ 535602=1.054 . Submission format: Only electronic submission on cloud, no paper based submission.\r\nYou should upload only 3 word files (no Excel file accepted):\r\n1. File-1: Deakin’s assignment cover page; letter of transmittal and table of contents\r\n2. File-2: The Assignment (answering problem 1 to 3)\r\n3. File-3: Reference file\r\nAssessment Type: Individual task, I may allow it as a group task in no more than 3 member group.\r\nAssignment format: No hand written text or equation or any other form of writing are acceptable. The entire assignment has be to types. All equations should be typed applying the equation function as shown below (or any other similar software). Text format equation should be avoided and not acceptable.\r\nThe assignment should have the following items, failing to do will cause negative marking:\r\n Deakin Assignment cover page (uploaded in the assignment folder);\r\n Letter of transmittal (if you don’t know what it is, please search on the Web, and the letter should be addressed to the Unit Chair and signed by all group members, writing the ID and names of the group members should be considered equivalent of signature);\r\n Table of contents (should indicate each problems, their sub-sections (such as a and b) and relevant page numbers;\r\n Executive summary and Introduction of the Assignment is not required. You can address the assignment problems directly;\r\n Content of the assignment should be the problems given to you and they should be answered in order;\r\n References\r\nMarks Distributions\r\nQuestion 1 Marks 10\r\nQuestion 2 Marks 20\r\nQuestion 3 Marks 08\r\nAssignment format and presentation Marks 02\r\nTotal Marks 40\r\nPage 2 of 6\r\nQuestion 1 (Marks 10)\r\nYou are making a plan to buy a house after 10 years from today. You are looking for an investment package which will at least produce $750,000.00 at the end of 10th year. There are 2 companies in the market (Company X and Y). Both of the companies are offering you an investment package for your purpose. The details of both of the packages are given below:\r\nCompany X offers a package of two investment opportunities X1 and X2 together. If you accept you will have to make separate investments in X1 for 10 years and X2 for 4 years. The investment in X1 should start now, however the investment in X2 will start in 7th year from now. Both investment (X1 and X2) will mature at the same time at the end of 10th year. The details of X1 and X2 investment plans are as follows:\r\nInvestment X1: The required investment at present is $65,000.00 which will go through 4 following phases (phase 1 to 4) in next 10 years. At the end of phase 1, 2 and 3 the entire fund will automatically be rolled over to the next phase for re- investment. The investment will mature at the end of phase 4. The 4 phases are as follows:\r\nPhase 1: During first 1 years the investment will earn 12% return p.a. as per simple interest method, then roll over to phase 2;\r\nPhase 2: In the following 2 years the investment will earn 9% return p.a. compounding daily, then roll over to phase 3;\r\nPhase 3: In the following 3 years the investment will earn 14% return p.a. compounding monthly, then roll over to phase 4;\r\nPhase 4: The final 4 years of the investment will earn 4% return p.a. compounding quarterly. The investment matures at the end of phase 4.\r\nInvestment X2: This investment is spread over 4 years. It will commence in the 7th year of the 10 year investment plan, so the timing of this 4 years will match the last 4 years of the 10 years of investment plan of X1. X2 requires an investment of $4100.00 at the end of each fortnight for 4 years, which will earn 16% p.a. return compounding fortnightly.\r\nBoth investments in X1 and X2 will mature at the end of the 10th year. How much, in total, will you accumulate from both investment opportunities at the end of 10th year?\r\nPage 3 of 6\r\nCompany Y offers a package of two investment opportunities Y1 and Y2 together. You will have to make separate investments in Y1 for 10 years and Y2 for 3 years. The investment in Y1 should start now, however the investment in Y2 will start in 8th year from now. Both investment (Y1 and Y2) will mature at the same time at the end of 10th year. The details of Y1 and Y2 investment plans are as follows:\r\nInvestment Y1: The required investment at present is $27,800.00 which will go through 4 following phases (phase 1 to 4) in next 10 years. At the end of phase 1, 2 and 3 the entire fund will automatically be rolled over to the next phase for re- investment. The investment will mature at the end of phase 4. The 4 phases are as follows:\r\nPhase 1: During first 3 years the investment will earn 12% return p.a. as compounding quarterly, then roll over to phase 2;\r\nPhase 2: In the following 2 years the investment will earn 8% return p.a. simple interest rate method, then roll over to phase 3;\r\nPhase 3: In the following 2 years the investment will earn 14% return p.a. compounding semi-annually, then roll over to phase 4;\r\nPhase 4: The final 3 years of the investment will earn 9% return p.a. compounding annually. The investment matures at the end of phase 4.\r\nInvestment Y2: This investment is spread over 3 years. It will commence in the 8th year of the 10 year investment plan, so the timing of this 3 years will match the last 3 years of the 10 years of investment plan of A1. A2 requires an investment of $17,000.00 at the beginning of each month for 3 years, which will earn 6% p.a. return compounding monthly.\r\nBoth investments in Y1 and Y2 will mature at the end of the 10th year. How much, in total, will you accumulate from both investment opportunities at the end of 10th year?\r\nAnswer the following questions:\r\n1. How much each of the package would accumulate at the end of 10th year? Show your calculations.\r\n2. Which one of the packages would you accept for your purpose?\r\n(Assume 1 year = 12 months = 52 weeks = 365 days).\r\nPage 4 of 6\r\nQuestion 2 (Marks 20)\r\nThe balance sheet and income statement of Company Z are given below:\r\nBalance Sheet\r\nAssets\r\n2016\r\n2015\r\n2014\r\n2013\r\n2012\r\nCash & Equivalents\r\n$336,818\r\n$319,978\r\n$313,578\r\n$310,378\r\n$303,978\r\nTrade Accounts Receivable\r\n$131,359\r\n$124,791\r\n$122,295\r\n$121,047\r\n$118,551\r\nInventory\r\n$11,789\r\n$11,199\r\n$10,975\r\n$10,863\r\n$10,639\r\nOther Current Assets\r\n$114,518\r\n$108,793\r\n$106,617\r\n$105,529\r\n$103,353\r\nTotal Current Assets\r\n$594,484\r\n$564,761\r\n$553,465\r\n$547,817\r\n$536,521\r\nLong-Term Investments\r\n$80,836\r\n$76,795\r\n$75,259\r\n$74,491\r\n$72,955\r\nNet Fixed Assets\r\n$390,709\r\n$371,174\r\n$363,750\r\n$360,038\r\n$352,614\r\nIntangible Assets\r\n$60,627\r\n$57,596\r\n$56,444\r\n$55,868\r\n$54,716\r\nOther Non-Current Assets\r\n$77,468\r\n$73,595\r\n$72,123\r\n$71,387\r\n$69,915\r\nTotal Assets\r\n$1,204,124\r\n$1,143,921\r\n$1,121,041\r\n$1,109,601\r\n$1,086,721\r\nLiabilities\r\nAccounts Payable\r\n$27,508\r\n$26,133\r\n$25,610\r\n$25,349\r\n$24,826\r\nNotes Payable\r\n$74,841\r\n$71,099\r\n$69,677\r\n$68,966\r\n$67,544\r\nAccrued Liabilities\r\n$363,763\r\n$345,576\r\n$338,664\r\n$335,208\r\n$328,296\r\nOther taxes Payable\r\n$10,105\r\n$9,599\r\n$9,407\r\n$9,311\r\n$9,119\r\nCurrent Portion of Long-Term Debt\r\n$87,573\r\n$83,194\r\n$81,530\r\n$80,698\r\n$79,034\r\nTotal Current Liabilities\r\n$563,790\r\n$535,602\r\n$524,889\r\n$519,532\r\n$508,820\r\nLong-Term Debt\r\n$333,450\r\n$316,778\r\n$310,442\r\n$276,236\r\n$270,540\r\nOther Long-Term Liabilities\r\n$77,468\r\n$73,595\r\n$72,123\r\n$71,387\r\n$69,915\r\nTotal Long-Term Liabilities\r\n$410,918\r\n$390,373\r\n$382,565\r\n$347,623\r\n$340,455\r\nTotal Liabilities\r\n$974,708\r\n$925,975\r\n$907,454\r\n$867,156\r\n$849,275\r\nShare capital\r\n$190,000\r\n$190,000\r\n$190,000\r\n$190,000\r\n$190,000\r\nRetained Earnings\r\n$39,417\r\n$27,947\r\n$23,587\r\n$52,446\r\n$47,446\r\nTotal Equity\r\n$229,417\r\n$217,947\r\n$213,587\r\n$242,446\r\n$237,446\r\nTotal Liabilities and Equity\r\n$1,204,124\r\n$1,143,921\r\n$1,121,041\r\n$1,109,601\r\n$1,086,721\r\nNo of shares\r\n50,000\r\n50,000\r\n50,000\r\n50,000\r\n50,000\r\nNote: Corrected on 28/3/2017. There was error in the above two lines, I have now corrected them. Sorry for any inconvenience caused. Please make necessary corrections in your calculations and solutions.\r\nPage 5 of 6\r\nIncome Statement\r\n2016\r\n2015\r\n2014\r\n2013\r\n2012\r\nSales\r\n$1,079,445\r\n$982,295\r\n$1,144,212\r\n$982,491\r\n$982,334\r\nCost of goods sold\r\n$464,161\r\n$481,325\r\n$537,779\r\n$628,795\r\n$609,047\r\nGross Profit\r\n$615,284\r\n$500,970\r\n$606,432\r\n$353,697\r\n$373,287\r\nOperating Expenses\r\n$485,750\r\n$432,210\r\n$446,243\r\n$373,347\r\n$383,110\r\nOperating Profit\r\n$129,533\r\n$68,761\r\n$160,190\r\n-$19,650\r\n-$9,823\r\nOther Income\r\n$205,095\r\n$216,105\r\n$205,958\r\n$117,899\r\n$127,703\r\nOther Expenses\r\n$116,040\r\n$96,265\r\n$80,667\r\n$125,759\r\n$121,809\r\nEarnings Before Interest and Taxes\r\n$218,588\r\n$188,601\r\n$285,481\r\n-$27,510\r\n-$3,929\r\nInterest Expense\r\n$82,184\r\n$78,075\r\n$76,513\r\n$69,525\r\n$68,091\r\nEarnings Before Taxes\r\n$136,404\r\n$110,526\r\n$208,968\r\n-$97,034\r\n-$72,020\r\nIncome Taxes@30%\r\n$40,921\r\n$33,158\r\n$62,690\r\n-$29,110\r\n-$21,606\r\nNet Income\r\n$95,483\r\n$77,368\r\n$146,277\r\n-$67,924\r\n-$50,414\r\nAdditional Information\r\nOwners Compensation\r\n$213,730\r\n$190,172\r\n$196,347\r\n$182,940\r\n$187,724\r\nDepreciation Expense\r\n$97,677\r\n$92,794\r\n$90,938\r\n$90,010\r\n$88,154\r\nSelling Expenses\r\n$124,070\r\n$128,658\r\n$143,748\r\n$168,077\r\n$162,798\r\nLease Expenses\r\n$4,857.50\r\n$4,322.10\r\n$4,462.43\r\n$3,733.47\r\n$3,831.10\r\nAddress the following issues in your answers:\r\nCalculate the necessary ratios to analyse (interpret and explain) the performance of company Z over the 5 years period.\r\nMinimum requirements: You should follow the seminar questions on ratio analysis and at least calculate all the ratios shown in the seminar.\r\nStandard expectations: I would expect you to do research on ratio analysis and performance analysis and add additional ratios/graphs/charts/trend analysis/pie diagram/or any other (use all or some of them) to improve your analysis.\r\nPage 6 of 6\r\nQuestion 3 (Marks 8)\r\nVisit http://www.rba.gov.au/statistics/cash-rate/ to see the record of cash rate changes by RBA. Take the post GFC period (2008 to 2016) and identify the possible reasons for cutting Australian interest rate till today.\r\nAddress the following issues in your answers:\r\n1. Identify the reasons for cutting interest rate on a continuous basis and keeping it at such low level.\r\n2. Show your analysis/calculations to support your reasoning."