THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALL

AC1025 ZA

BSc DEGREES AND GRADUATE DIPLOMAS IN ECONOMICS, MANAGEMENT,

FINANCE AND THE SOCIAL SCIENCES, THE DIPLOMA IN ECONOMICS AND
SOCIAL SCIENCES AND THE CERTIFICATE IN HIGHER EDUCATION IN SOCIAL
SCIENCES EXAMINATION

Principles of Accounting

Friday 10 May 2019: 14.30 - 17.45

Time allowed: 3 hours and 15 minutes

DO NOT TURN OVER UNTIL TOLD TO BEGIN

Section A of this examination consists of 15 Multiple Choice Questions. You should

attempt to answer ALL the questions. Each question has four possible answers (A-D).
There is only one correct answer to each of the questions. Please mark the correct
answer on the special sheet provided. The maximum mark for this part is 30.

Sections B and C: Please answer Question 16 (30 marks) of Section B; ONE

question from Section C and ONE further question from either section B or C (except
for Question 16 all questions are worth 20 marks).

For Sections B and C only, workings should be submitted for all questions requiring
calculations. Any necessary assumptions introduced in answering a question are to be
stated.

Extracts from compound interest tables are given after the final question on this paper.

8-column accounting paper is provided at the end of this question paper. If used, it
must be detached and fastened securely inside the answer book.

A handheld calculator may be used when answering questions on this paper and it
must comply in all respects with the specification given with your Admission Notice.
The make and type of machine must be clearly stated on the front cover of the answer
book.

© University of London 2019

UL19/0063 Page 1 of 20
SECTION A: Multiple Choice Questions

Please mark the correct answer on the special multiple choice answer sheet
provided using a pencil.

Candidates should write their candidate number in the boxes and then mark up their
appropriate letter and numbers in the grid.

The date, candidate first name(s) and surnames should be written in the appropriate
space.

Candidates should use an eraser to remove any unwanted marks as fully as possible.

If an eraser is unavailable, please put a cross (X) through the incorrect mark.

The sheets should not be folded or creased in any way as this will make them
unreadable.

Candidates should not write anywhere else on the sheet other than to mark their
answers as shown on the sheet; any writing or marks in an inappropriate place could
make the sheet unreadable.

UL19/0063 Page 2 of 20
SECTION A

Candidates should answer ALL questions from this section.

1. Consider these four statements:

(i) The market value of a share in a company listed on a major stock

exchange will always exceed its par value
(ii) A limited liability company will always have more net assets than
a partnership
(iii) The directors of a limited liability company cannot all be
shareholders of the company
(iv) The directors of a company cannot pay a dividend if the company
makes a loss for the year

A All of the statements are correct

B All of these statements are incorrect
C Statements (i) and (ii) and (iii) are correct
D Statements (iii) and (iv) are correct

2. At 31 March 2019, the cash book of Company 2 showed a debit balance of £56.
An examination of the bank statements and the accounting records of the
company revealed the following:

On 30 March 2019, the bank wrote to Company 2 stating that a cheque of £360
received from a customer and banked on 25 March 2019 had bounced and had
been dishonoured. This letter was only received by Company 2 on 2 April 2019.
Bank charges of £460 appeared on the bank statement on 30 March 2019 but
the company was unaware of this transaction. Receipts of £9,215 banked on
31 March 2019 were not cleared through the banking system until April 2019,
while payments totalling £19,401, issued by the company in March 2019 were
also not cleared through the banking system until April 2019.

What was the balance appearing on the bank statement at 31 March 2019?

A £9,422
B £(10,950)
C £9,310
D £10,142

UL19/0063 Page 3 of 20
 3. The selling price of the inventory of Company 3, a wholesaler of exotic fruit, at
30 April 2019 is £89,000. The company sells its goods at a 45% margin. 25% of
the inventory has reached its ‘sell-by’ date and will be sold for £9,500.

Which of the following will be the correct value for closing inventory at that date
appearing in the statement of financial position?

A £39,538
B £46,212
C £55,534
D £52,564

4. On 1 February 2019, Company 4 had 50 units in inventory costing £26 each.

During the month, the following transactions occurred:

Date Buy/sell Units Price

2.2.19 Buy 74 £29
11.2.19 Sell 93 £61
13.2.19 Buy 65 £33
17.2.19 Buy 68 £27
25.2.19 Sell 100 £56

What is (i) the value of inventory at 28 February 2019 and (ii) the cost of goods
sold (COGS) for the month of February 2019 using the LIFO basis of
accounting?

Inventory COGS
£ £
A 1,895 5,532
B 1,856 5,571
C 1,706 5,721
D 1,878 5,549

5 A refund from a supplier of £1,500 was entered in the cash book as a receipt
and treated as a receipt from a customer in the sales (receivables) ledger
control account.

Which of the following accounting entries is needed to correct this?

Sales Payables Bank

(receivables) (suppliers) account
Control account Control
account
A Cr: £1,500 Dr: £1,500
B Dr: £1,500 Cr: £1,500
C Cr: £1,500 Dr: £1,500
D No adjustment is
needed

UL19/0063 Page 4 of 20
 6. One of the non-current assets – a vehicle – owned by Company 6 was sold
during the year for £2,000. The sum was received in cash. Instead of banking
this sum, the finance director used this sum as a deposit for the purchase of a
new van, the full cost of which is £16,000. The cost and accumulated
depreciation of the vehicle sold has already been correctly accounted for.
Depreciation at 25% on a straight-line basis of £3,500 has been accounted for.

Which of the following accounting entries is needed to correct this?

Vehicles: Vehicles: Depreciation Vehicle:

at cost Accumulated expense disposal
depreciation account
A Dr: £2,000 Cr:£2,000
B Dr: £2,000 Cr: £500 Dr: £500 Cr:£2,000
C Dr: £1,500 Dr: £500 Dr:£2,000
D No adjustment is needed

7. The following information relates to Company 7a and Company 7b, both of

which trade in similar activities and face similar risks:

Company 7a Company 7b
Profit before tax £7 million £32 million
Share price £5.70 £6.50
Tax expense £2.8 million £4.8 million
Number of shares 20 million 105 million

Which company has the higher earnings per share (EPS) and which company
is viewed by the market as having higher growth prospects?

A Higher EPS: Company 7a Higher growth prospects:

Company 7a
B Higher EPS: Company 7b Higher growth prospects:
Company 7a
C Higher EPS: Company 7a Higher growth prospects:
Company 7b
D Higher EPS: Company 7b Higher growth prospects:
Company 7b

UL19/0063 Page 5 of 20
 8 A machine required for this project was acquired 5 years ago for an earlier
project, at a cost of £25,000. It is being depreciated on a straight-line basis
over ten years. There is no expected selling price at the end of its useful
economic life. The machine has been locked in a warehouse for several
months since it has had no alternative use. However, the company has just
been offered an alternative contract, Project Z, using this machine which will
generate a contribution of £4,500. The net realisable value of the machine is
£5,600.

The cost of keeping this machine in perfect working order is £900, payable
immediately but if it is used in the project 8, the maintenance cost will be
£1,300.

What is the relevant cost of the project 8?

A £6,000
B £7,000
C £5,200
D £8,300

9. Company 9 makes three products, W, B and A. Unit costs and revenues

relating to the three products are as follows:

W B A
£ £ £
Selling price 500 700 640
Direct materials 85 200 120
Direct labour 105 15 35
Variable overheads 21 3 7
Fixed overheads 30 40 15
Total costs 241 258 177
Profit per unit 259 442 463

All three products use materials which cost £40 per kilogram but suitable
material is in such short supply that the company cannot fulfil the demand for
these three products in their entirety. In what order should these three
products be produced if the company wishes to maximise its profit?

Best 2nd best 3rd best

A A W B
B W B A
C B A W
D A B W

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10. Company 10, a local road building contractor, had budgeted indirect costs for
2019 of £600,000. Budgeted labour hours for the year were 12,500 costing
£260,000 and budgeted machine hours were 14,000. The company marks-up
the total cost of each job by 40% to determine selling price.

The company has just completed a road repair for the local council. The
direct costs and machine hours of this job were as follows:

Materials: £32,100
Labour: 305 hours
Machining: 75 hours

What is the total selling price of this job assuming the company allocates
overheads on:

(i) A labour hour basis

(ii) A machine hour basis

(i) Labour hour basis (ii) Machine hour basis

A £53,084 £41,659
B £74,318 £58,323
C £65,436 £49,441
D £20,496 £4,521

11. Which of the following is NOT a cause of overtrading?

A Just-in-time inventory planning

B A rapid expansion of the scale of a business without raising
additional long-term finance
C Buying substantial inventories at a discounted price
D Offering sales to customers on 1-year interest-free terms

12. Company 12 makes domestic robots.

The budget units to be sold and produced in February were 400. In

February, in fact, 425 units were sold and produced.

Budgeted and actual unit costs and revenues were as follows:

Budget Actual
£ £
Materials 40 43
Labour 27 26
Variable overheads 9 10
Fixed overheads 12 10
Total cost 88 89
Selling price 130 127
Profit 42 38

UL19/0063 Page 7 of 20
 The sales price and sales volume contribution variance were which of the
following:

Sales price variance Sales volume contribution variance

A £1,275 unfavourable £1,050 favourable
B £1,275 favourable £1,050 unfavourable
C £1,275 unfavourable £1,350 favourable
D £1,700 unfavourable £1,350 unfavourable

13. In 2018, Company 13 sold its only product for £575 per unit. Variable costs
per unit were £180. Fixed costs were £550,000. In 2019, the selling price per
unit is expected to fall by 9%, variable costs per unit are expected to rise by
20%, while fixed costs are expected to rise by 3%. Since the company’s
stated objective for 2019 is to make a profit before tax of £1 million, how many
units must it sell?

A 1,844
B 3,814
C 3,925
D 5,099

14. Sensitivity analysis is which of the following:

A The difference between the NPV and the IRR in conditions of uncertainty
B A means of reconciling the value of inventory using absorption costing with
its value using marginal costing
. C A means of assessing which variables will have the greatest impact upon a
management accounting decision
D The degree to which standard costing variances are interdependent

15. Company 15 is considering replacing all its machinery. The financial controller
has computed Net Present Value (NPV) of the project at two different discount
rates. The NPV at a discount rate of 12% is £1,700 negative and at a discount
rate of 5%, it is £340 negative. You are required to compute the Internal Rate of
Return (IRR) using linear interpolation or extrapolation.
.
The Internal Rate of Return of this project is which of the following:

A 6.8%
B 3.3%
C 3.8%
D 10.3%

UL19/0063 Page 8 of 20
SECTION B

Answer question 16 and not more than one further question from this section.

16. Moore Ltd is a family business which buys fruit and vegetables in the open
market and acts as a wholesaler and retailer of these goods. The company’s
trial balance at 31 December 2018 before any adjustments have been made is
as follows:

Dr Cr
£ £
Land 150,000
Plant & equipment at cost 360,000
Plant & equipment, accumulated
depreciation at 1 January 2018 108,000
Delivery vans at cost 86,000
Delivery vans, accumulated
depreciation at 1 January 2018 44,000
Inventory at 1 January 2018 123,000
Trade receivables 183,000
Provision for bad debts at 1 January
2018 10,000
Prepaid insurance at 1 January 2018 3,000
Accrued interest at 1 January 2018 4,000
Accrued electricity at 1 January 2018 8,000
Bank balance 18,000
Trade payables 111,000
10% debenture loan repayable in 80,000
2021
Ordinary share capital of 600,000
shares of 50p each 300,000
Retained profits at 1 January 2018 60,000
Sales revenue 2,049,000
Returns inward 88,000
Purchases 1,391,000
Insurance 17,000
Interim dividend paid 28,000
Distribution costs 327,000
Advertising 15,000
Electricity 20,000
Interest paid 6,000
Suspense account 5,000
Total 2,797,000 2,797,000

UL19/0063 Page 9 of 20
 The following additional information is available:

i. On 1 June 2018, the company paid building insurance on one of its warehouses
of £6,000 for the twelve months ended 31 May 2019.

ii. Provision for any unpaid interest is to be made. An electricity invoice of £9,000
for the three months ended 31 January 2019 was received by the company on
6 February 2019. The directors propose to pay a dividend of £12,000 on 31
March 2019.

iii. In December 2018, the company sold a delivery van for £20,000. This sum was
received in cash and was not banked until 5 January 2019. The van which was
sold had been purchased in 2017 for £40,000. Neither the sale, nor the
proceeds of sale, have been accounted for in the accounting records of the
company.

iv. Depreciation is to be provided on the non-current assets using the following

annual rates:

Land nil
Equipment 20% per year on a straight line basis
Delivery vans 40% per year on a reducing balance basis

A full year’s depreciation is provided in the year of acquisition and no

depreciation is provided in the year of disposal.

v. The inventory was counted on 31 December 2018 and valued at its selling price
of £196,000. Goods are marked-up by 40%.

vi. Corporation tax for the year ended 31 December 2018 is estimated to be
£19,000 and is to be paid on 1 October 2019.

vii. The company’s bookkeeper is new to the job and is not sure how to deal with
the following items:

(i) The sum of £14,000 was received as a direct payment into the company’s
bank account in December 2018 from a customer but it was unclear to her
which customer had sent this money.

(ii) The company’s corporation tax liability for the year ended 31 December
2017 had been estimated to be £60,000. However, the UK tax authority (known
as HMRC) had advised the company that, in fact, £69,000 was to be paid.

She has therefore credited the £14,000 and debited the remaining balance on
the taxation account respectively to a suspense account in the trial balance.

UL19/0063 Page 10 of 20
viii. A customer owing £9,000 has recently been declared bankrupt. The company
does not expect to recover any of this. A provision for bad debts of 5% of
remaining trade receivables is to be provided.

Required:

(a) Prepare an income statement for Moore Ltd for the year ended 31 December
2018, a statement of financial position at 31 December 2018 and statement of
changes in equity for the year ended 31 December 2018 in a form suitable for
presentation to the directors.

(26 marks)

(b) Prepare an answer to the following email you have recently received from the
company’s sales director:

“The £15,000 advertising expense relates to a television campaign over the

2019 New Year holiday and was aimed at increasing customer awareness of
seedless dates totally new to UK consumers. I expect a huge interest in this
product in 2019 and I believe the £15,000 should be treated as an asset and
not as an expense in the 2018 accounts.”

(4 marks)

(Total 30 marks)

UL19/0063 Page 11 of 20
17. The statements of financial position of Stiles Limited as at 31 December 2018
and 2017 and a summary of the income statement for the year ended 31
December 2018 appear below:

Statements of financial position at 31 December

2018 2017
£000 £000
Non-current assets
Land 900 600
Plant and machinery 230 255
1,130 855
Current Assets
Inventory 290 445
Trade receivables 608 420
Cash at bank 5 65
903 930
Total assets 2,033 1,785

Liabilities and equity

Non-current liabilities
8% redeemable preference shares 50 200
10% convertible debenture stock 180 150
230 350
Current liabilities
Trade payables 752 680
Interest accrued 4 5
Tax 37 29
Bank overdraft 160 86
953 800
Total liabilities 1,183 1,150
Equity
Ordinary share capital 240 140
Share premium 365 340
Revaluation reserve 170 70
Retained earnings 75 85
Total equity 850 635

Total liabilities and equity 2,033 1,785

UL19/0063 Page 12 of 20
 Summary Income Statement for the Year Ended 31 December 2018

£000
Operating profit 170
Preference share dividend (10)
Interest expense (18)
Profit before tax 142
Tax (26)
Profit after tax 116

You are given the following information:

(i) The company’s depreciation policy is not to depreciate the land but to
depreciate the plant and machinery.

(ii) During the year items of plant machinery were sold at a profit of £7,000.
These machines had a net book value of £20,000.

(iii) Plant and machinery was acquired during the year at a cost of £17,000.

(iv) The new 10% convertible loan stock was issued on 1 January 2018 at
par.

(v) Some of the 8% redeemable preference shares were redeemed, at par,

on 1 July 2018.

(vi) A dividend on the ordinary shares was paid during the year.

Required:

(a) Prepare a cash flow statement, together with the reconciliation statements of
operating profit and cash balance, for Stiles Limited for the year ended 31
December 2018.
(16 marks)

(b) Critically evaluate this company’s cash flow statement.

(4 marks)

(Total: 20 marks)

UL19/0063 Page 13 of 20
 18. The Chief Executive Officer of Charlton plc, a large, diversified multinational
company, has asked you to examine the accounts of two other companies,
Cohen Limited and Wilson Limited. These two companies have been
identified by the chief accountant of Charlton plc as promising takeover
targets.

Cohen Wilson
Ltd Ltd
Income statements for the year
ended 31 December 2018 £000 £000
Sales revenue 11,360 5,622
Cost of goods sold 7,950 4,225
Gross profit 3,410 1,397
Operating expenses 1,422 795
Operating profit 1,988 602
Interest expense 402 28
Profit before tax 1,586 574
Taxation 492 202
Profit after tax 1,094 372

£000 £000
Statements of financial position at
31 December 2018
Non-current assets 6,990 2,246
Current assets
Inventory 2,820 720
Trade receivables 1,352 828
Cash at bank 1,910 1,423
6,082 2,971
Total assets 13,072 5,217
Current liabilities
Trade payables 1,425 1,109
Taxation 690 296
Overdrafts and short-term loans 3,424 637
5,539 2,042
Non-current liabilities: long-term 1,255 500
Loans
Total liabilities 6,794 2,542
Equity
Share capital (£1 shares) 2,530 1,520
Share premium 2,040 -
Revaluation reserve - 800
Retained profits 1,708 355
Total equity 6,278 2,675
Total liabilities and equity 13,072 5,217

UL19/0063 Page 14 of 20
 Other information which has been provided:

Cohen Wilson
Ltd Ltd
£000 £000
(i) Operating expenses include 382 195
depreciation
(ii) Expenditure on non-current 1,572 186
assets in 2018
(iii) Retained profits at 31
December 2017 1,134 23

(iv) The market value of shares in these two companies at 31 December 2018
was as follows:

Cohen Ltd £5.24

Wilson Ltd £1.25

(v) The long-terms loans of these companies are secured debenture loans
repayable as follows:

Cohen Ltd in 2030

Wilson Ltd in 2037

Required:

(a) Compute the following ratios for these two companies to 1 decimal place, using
in each case, the appropriate notation:

Return on capital employed

Return on equity (after tax)
Payables period
Quick (or acid test) ratio
Dividend cover
Dividend yield
Interest cover
Gearing

(10 marks)

(b) Prepare notes for the board meeting at which these two companies will be
considered. Your notes should provide a comparison of the ratios you have
computed and any other factors you think should be brought to the attention of
the board using the information which has been provided, above.
(10 marks)

(Total: 20 marks)

UL19/0063 Page 15 of 20
 SECTION C

Answer ONE question from this section and ONE further question from either
Section B or Section C.

19. Peters Limited manufactures casings for toy drones. The standard cost of this
product is as follows:

£
Material X 8kg at £4/kg 32.00
Material Y 4kg at £7/kg 28.00
Labour 3 hours at £17/hour 51.00
Variable overheads 3 hours at £13/hour 39.00
Fixed overheads 12.50
Total Cost 162.50

Variable overheads are absorbed on a labour hour basis. The standard selling
price is £199 and budgeted production and sales for April 2019 was 120,000
units. In this month, actual sales and production were 124,500 units and sales
revenue totalled £23,779,500.

Actual costs in the month were as follows:

£
Material X 809,250 kg 3,358,388
Material Y 529,125 kg 3,677,419
Labour 423,300 hours 6,561,150
Variable overheads 5,756,880
Fixed overheads 1,560,000
Total Costs 20,913,837

Required:

(a) Produce a performance report reconciling the actual profit to the budgeted profit
for the year, using the contribution approach showing both efficiency/usage and
price/rate variances.
(14 marks)

(b) Write a brief report for the directors of the company to explain possible causes
for each variance and drawing attention to any possible interdependence
between any of these variances.
(6 marks)

(Total 20 marks)

UL19/0063 Page 16 of 20
 20. Hunt Chemicals is preparing a cash budget for June and July 2019. At the end
of July 2019, the company has undertaken to repay a £100,000 loan to their
bank which had been borrowed in February 2019 to enable the business to
survive during the seasonal peak in the second quarter of the calendar year,
April to June. The bank balance at 1 June 2019 is expected to be £17,500.

Budgeted sales revenues are as follows:

April 2019 £360,000

May 2019 £500,000
June 2019 £600,000
July 2019 £300,000
August 2019 £240,000

Additional information:

(i) 70% of sales revenue is expected in the month of sales, subject to a 2% prompt
payment discount. 20% of sales revenue is expected in the month following
sales. 7% of sales revenue is expected to be received two months after sale
and the remainder of sales revenue is expected to be uncollectable.
(ii) The average selling price per unit is £100 and the average cost price is £75.
50% of the purchase price of goods is expected to be paid in the month of
purchase and 50% in the following month.
(iii) Target closing inventory is equal to the cost of goods sold in the following
month plus 25%.
(iv) Budgeted annual overheads are £800,000 which includes £300,000 of fixed
costs of which £60,000 is depreciation. The remainder of the overheads are
variable costs which vary with sales revenue and are paid in the month in which
they occurred. The budgeted sales revenue for 2019 is £3 million.
(v) A dividend of £40,000 will be paid and non-current assets costing £50,000 will
be purchased and paid for in June while corporation tax of £75,000 will be paid
in July.

Required:

(a) Produce a cash budget for each of the months June and July 2019, in columnar
form.
(15 marks)

(b) Present a brief report to the directors of Hunt Chemicals, advising them on
steps which could be taken to improve the cash position of the business and
how they could seek to avoid a cash crisis when the next seasonal peak arises
in April to June 2020.
(5 marks)

(Total: 20 marks)

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21. The professional football club, Hurst Academicals, is considering acquiring a
highly successful German international footballer. The transfer fee will be £42m,
half of which is payable immediately and the other half payable in one year’s
time. His annual salary during his 4-year contract will be £15.5 million. At the
end of his contract, the player will have no resale value to the club. The club’s
sponsor has agreed to increase the annual sponsorship fee from £4m to £16m,
payable in advance. Annual income from gate money is expected to rise by
£6m in year 1 and increase by 10% each year, thereafter. Merchandising
income, from the sale of club shirts emblazoned with the player’s name is
expected to be £1m in year 1, rising by 5% each year. The player has a poor
injury record and the club will pay an initial insurance premium of 10% of the
transfer fee, payable in advance to protect the club against the risk of his
contract coming to an early end as a result of this problem. As a consequence
of this transfer, the club will be able to loan two other players to an inferior
team, elsewhere in north London, thereby making annual salary savings of £9
million.

Assume that all transactions are in cash and arise at the end of the year
concerned except where indicated above. The company’s cost of capital is
12%.

Required:

(a) Calculate the Net Present Value (NPV) of this acquisition.

(8 marks)

(b) Calculate the Accounting Rate of Return (ARR) using the average investment
method and assuming the company uses the straight line basis of depreciation.
(4 marks)

(c) Advise the company’s directors whether or not they should proceed with this
acquisition, giving the reasons for your recommendation.
(2 marks)

(d) What other facts should be taken into consideration in a decision of this nature?
(2 marks)

UL19/0063 Page 18 of 20
 (e) The company’s financial advisor has suggested that instead of buying the
player outright and in the two instalments referred to above, that instead, the
player is acquired by the payment of 4 equal annual payments. At what annual
cost payment would the club be indifferent between the original payment of £42
million in two instalments and

(i) Four equal annual instalments, payable annually, the first instalment to
be paid in one year?
(2 marks)

(ii) Four equal annual instalments, payable annually, the first instalment
being paid immediately?
(2 marks)

(Total: 20 marks)

END OF PAPER

*****************************************
Extracts from Compound Interest Tables are attached on the following page.

UL19/0063 Page 19 of 20
 Extracts from compound interest tables

Present value of £1
P

%
R 1 2 3 4 5 6 7 8 9 10
Period
1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909
2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826
3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751
4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683
5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621

%
" 11 12 13 14 15 16 17 18 19 20
Period
1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833
2 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694
3 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579
4 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482
5 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402

Annuity of £1

% 1 2 3 4 5 6 7 8 9 10
Period
1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909
2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736
3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487
4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170
5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791

% 11 12 13 14 15 16 17 18 19 20
Period
1 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833
2 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 1.528
3 2.444 2.402 2.361 2.322 2.283 2.246 2.210 2.174 2.140 2.106
4 3.102 3.037 2.974 2.914 2.855 2.798 2.743 2.690 2.639 2.589
5 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3.058 2.991

END OF PAPER

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