FPSBI/M-VI/07-01/09/WN-15

Transcription

1 Case - Devnarayan 1) B) Term Till Devyani is 80 years inflation 5.00% p.a % p.m. Returns 9.00% p.a % p.m. Inflation adjusted returns % p.m. Requirement p.m. returns needed today PV of future monthly requirement PV(0.312%,12*43,-35000,0,1) 2) B) Yearly effective Inflation 5.00% p.a % p.m. Debt 8.00% p.a % p.m. Equity 14.00% p.a % p.m. Devansh's higher education 30:70 in Debt and Equity amount needed At Age 21 At Age 22 No of years to go when required Note: For exact corpus requirement we need to follow an alternative method. Assumptions for Devansh Yearly investment 100 At Age 21 Ratio At Age 22 Debt Equity To get Rs after a year he needs to invest at present Rs. Thus the corpus needed at age 21 is Rs. To get a corpus of Rs he needs to invest monthly Rs *593979/ * / ) B) RFA Basic Sal *12 DA *0.5 CCA *12 Children Edu 4800 (200*12*2) Transport All 4800 ( )*12 Bonus Gross Salary RFA *0.075 FPSB India/Public 1

2 4) A) present age of Devnarayan 35 present age of Devyani 37 retirement age of Devnarayan 55 time to retire for Devnarayan 20 years Monthly savings yearly increase in savings 8% Devyani's age when Devnarayan retires expected total life of Devyani 80 Devyani alive after retirement of Devnarayan 23 years present expenses per year *12 inflation 5% Rate of returns 10% Expenses on retirement FV(5%,20,0, ,0) retirement benefits corpus needed at retirement PV((1+0.1)/(1+0.05)-1,23, ,0,1) 5) B) value of savings at retirement Surplus ( ) Sum Assured Bonus Total amount due Premium per quarter 4000 Unpaid premium less 4000*3 Amount to be payed today ((45000*(((1+0.1)^(20)-(1+0.08)^(20))/( )))*1.1) ) B) Computation of Income to be clubbed with Devnarayan a) Minor Son's share in another firm (Exempt) Nil b) Interest on minor's capital with firm (Rs. 18,000*2 - Exemption u/s 10(32) Rs. 1,500*2) ) C) Mutual Fund Return of 1 Standard Sharpe Ratio Rank Fund year Deviation A 15.33% % 1 D 9.06% % 2 C 10.25% % 3 B 12.54% % 4 (15.33%-6%)/42.76 (9.06%-6%)/15.26 (10.25%-6%)/23.78 (12.54%-6%)/37.15 FPSB India/Public 2

3 8) D) Interest 4% NPER 12 Fv pv PV(4%,12,0,-38425,0) FY Balance B/F Interest Balance C/F *((1.04)^2-1) *((1.04)^2-1) *((1.04)^2-1) *((1.04)^2-1) *((1.04)^2-1) *((1.04)^2-1) 9) A) Suppose Dividend Declared = 100 DDT 15% of Divident Declared 15 Surcharge of Divident Declared 1.5 Education Cess & 3% of DDT & Surcharge (15+1.5)*0.03 Total deduction Thus divident received is Devnarayan has received Rs as devidend in his bank Thus the total of amount of divident distributed is Rs *20647/ from the above calculations we know that the deducted amount of DDT and other taxes are ) C) Present Wedding Cost each inflation 5% p.a. Equity MF Returns 14% p.a. Equity present value to utilise 25% *0.25 A total of 18 installments beginning 1st Mar 2009 will continue till Devansh is 25 years and Devesh is 23 years of age. Devansh Devesh Present age 8 6 Wedding at the age of Time left for Wedding Cost of wedding then Marriage fund of Devesh discounted at the investment rate of 14% when Devansh's funds are withdrawn /(1.14)^2 Hence, total funds sought to be accumulated in a period of 20 years As the installments are made for 18 years, the funds so accumulated are invested for 2 additional years before the same are partially redeemed for Devansh's marriage Hence, value of such yearly accumulation 2 years prior to their need /(1.14)^2 Yearly investment needed (18096) PMT(14%,18,-45000, ,1) FPSB India/Public 3

4 11) C) Value Units Dividend 1.5% 0.15 per unit total Dividend = Rs * Loss on sale of units Investment amount Present Value Loss on sale of units Dissallowed loss Loss carried forward ) A) 13) B) 14) B) 15) C) Case - Anoop 16) D) The rate of return in the fund to be invested 15% Cost inflation of Education 6% Inflation discounted rate of growth of funds 8.49% ((1.15/1.06)-1)*100 Net Present Value of the stream of funds required NPV Present age of Manish 5 First investment to be made at age 5, second at age 6, third at age 7, , seventeenth at age 21. Total number of annual installments needed 17 Yearly investments beginning today for the above stream of funds PMT(15%,17, ,0,1) FPSB India/Public 4

5 17) C) 18) D) As per Section 56 (2) (VI) gift agreegating exceeding in cash in a particular FY is taxable as Income of the reciepnt 19) D) as per section 40 A(3) of income tax act payment of expenditure in cash of more than rs in cash or by bearer cheque is disallowed. 20) C) Cash Flows (Rs) Projects C0 C1 C2 C3 IRR NPV (826.45) ) A) 22) A) because if he first transfer house to Anoop by gift then to calculate Capital gain Cost of Acquistion is taken of previous owner, but indexation is taken from the FY in which gift is given.( As per section 49(1) of Income tax act). 23) A) 24) A) Premium Amount Allocation Charges Mortality charges Actual Investment Amount return on equity Closing Fund value Surrender Charge Surrunder value of policy ) B) Present value of house on reinstatement basis cost of construction 5 year before 20 Lakh Escalation in Cost of Construction 10.00% Present Cost of Construction ,00,000*(1+10%)^5 Present value of Insurance on reinstatement basis lakh Note: The value of Insurance on reinstatement basis the depreciation of the property is not considered FPSB India/Public 5

6 26) D) 27) B) Account opening date 25/03/2004 Maturity date 1/4/2019 Bal as on 01/04/ Rate of interest 8% Contibution Left 10 Maximum permissable contribut Extension Block 5 years After extension maturity on= 1/4/2024 Pre extension maturity amount= PV= ROI= 8% PMT= NPER= 10 Mode= End FV= 1,769,683 FV(8%,10,-70000, , 0) After extension maturity amount= PV= 1,769,683 ROI= 8% PMT= 0 NPER= 5 Mode= End FV= 2,600, FV(8%,5,0, ,0) 28) D) Loan Amount Interest Rate 11.25% Monthly Interest rate % EMI 6560 O/S Interest Paid Principal Paid PMT(0.9375%, 60, , 0, 0) FPSB India/Public 6

7 Principal OS after 36th installment Prepayment Penalty Charges *2.5% Total Amount to be paid to square off his ost loan amount ) D) 30) A) A lady at 63 has little appetite for risk as she no longer has any earning power. Further, she needs certainty of income. But a small amount of equity is still recommended as a hedge against inflation. If not, if she lives until say 80, she will experience a drop in his standard of living. FPSB India/Public 7