a

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a. The following are information of MS Tech which you must consider:

 "Finance income” for the Financial Year Ended (FYE) 30 June 2020 was RM9.37 million, a slight reduction from the 2019 figure of RM9.415 million;

The CFO targets to achieve minimum “Finance income” of RM10 million for the FYE 30 June 2021; and

“Deposits, cash and bank balances” at the start of FYE 30 June 2021 stood at RM429.716 million, and the Chief Financial Officer (CFO) has decided to commit 33.3% from this amount towards investments in highly liquid financial securities. It is assumed that only this investment commitment generates “Finance income” for the company.

What is the minimum rate of return that the CFO must expect from MS Tech's investments in the highly liquid financial securities in order to achieve his targeted "Finance income” of RM10 million during the FYE 30 June 2021?

b. If the average return from the investments in this highly liquid financial securities was 6%, will the CFO achieve his targeted “Finance income” during the FYE 30 June 2021? Briefly explain your answer.

c. The following are information of MS Tech which you must consider:

"Non-current borrowings” figure for the Financial Year Ended (FYE) 30 June 2020 was RM8.709 million. The figure was attributed by single financing agreement which was signed exactly three (3) years prior to 30 June 2020. The amount is to be paid lump sum by MS Tech to the financier in 24 months' time (i.e. two (2) years from the date 30 June 2020); and

MS Tech was made to understand that the financier's hurdle rate at the time of agreement was 10.75%.

What was the amount borrowed by MS Tech (rounded to the nearest thousand) in this five- year financing facility?