FINAL EXAMINATION
FINANCIAL PLANNING AND BUDGETING: SED 626
UNIVERSITY OF JUBA
School of Social and
Economic Studies
P.O. Box 82
Juba, South Sudan
Department of Economics
FINAL EXAMINATION
COURSE: FINANCIAL PLANNING AND BUDGETING (SEB 626)
ACADEMIC PERIOD: APRIL – JULY 2023
INSTRUCTOR/LECTURER: ARIIK DAVID AGUTO RENG
DATE: 11 JULY 2023
FINAL EXAMINATION
FINANCIAL PLANNING AND BUDGETING: SED 626
INSTRUCTIONS:
DURATION: 3 HOURS
This examination has two sections: Sections A and B.
Section A is COMPULSORY. Students must attempt all the questions in section A. Section B contains four
(4) questions. Students must choose and complete any two (2) questions from this section. Each question is
worth 25 points. Students are advised to observe the following additional instructions:
1. Students must read and understand each question before you respond. Your responses must be concise,
yet carefully reasoned arguments.
2. Students must be aware of time and point allocation – students must budget their time accordingly to
complete ALL the required questions.
3. Students must number questions and corresponding responses/answers in the answer booklet (s)
provided.
4. Students must write as neatly as possible. Marks may be docked for illegible handwriting.
5. Students must write their Full Official Names and Student IDs on all answer booklets used.
GOOD LUCK   ! !
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FINAL EXAMINATION
FINANCIAL PLANNING AND BUDGETING: SED 626
SECTION A: Students must attempt ALL THE QUESTIONS in this section.
Question 1
In order to advance economic development in the country, the Government of the Republic of South Sudan
(GRSS) is considering constructing and commissioning a 7,000-Megawatt hydroelectric power plant at the
foot of Mount Kinyeti in Eastern Equatoria state. Professional economists and analysts have estimated that
the project will cost United States Dollars (USD) 10 billion in initial capital outlays. This national project is
projected to be fully operational after five (5) years of planning, design, and construction. In addition to the
initial capital outlays, the project will require an additional USD 100 million in annual operating and
maintenance costs (OMC) at the end of each year in operation. Equally, it is estimated that the project will
generate annual benefits of USD 1.95 billion at the end of each year in operation. The project will have a
useful life of fifty (50) years with no residual or scrap value after decommissioning.
a) Given that the Government of the Republic of South Sudan (GRSS) uses a discount rate of 7.5
percent to appraise public infrastructure projects, compute the present value of the costs and benefits
of the project. [8 points]
b) Perform a cost-benefit analysis (CBA) to determine whether the project should be undertaken by the
Government of the Republic of South Sudan. [8 points]
c) You have been hired as a Technical Consultant on this project, advise the Government of Republic
of South Sudan on credible sources of financing for this critical national project. [5 points]
d) In addition to monetary considerations, what other factors should the Government of the Republic of
South Sudan take into account in deciding to implement this project? [4 points]
Question 2
Taxation is the ultimate source of revenue for most governments around the world. However, the Government
of the Republic of South Sudan (GRSS) currently collects tax revenues below potential.
a) Identify and describe the possible reasons why the Government of the Republic of South Sudan does
not currently collect enough revenues from taxation. [15 points]
b) As a Taxation Specialist, advise the new Commissioner-General (CG) of the National Revenue
Authority (NRA) on policy options to consider in improving the taxation system in order to raise
optimal revenues from taxation. [10 points]
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FINAL EXAMINATION
FINANCIAL PLANNING AND BUDGETING: SED 626
SECTION B: Students must attempt ANY TWO QUESTIONS in this section.
Question 3
You are the Director-General at the Directorate of Financial Planning and Budgeting at the Ministry of East
African Community of the Government of the Republic of South Sudan (GRSS). The Ministry of East African
Community is planning to organize a high-level public event in Juba in September 2023. The event will be
attended by ten (10) High-level government officials and representatives from the East African Member
States. As the Director-General at the Directorate of Financial Planning and Budgeting at the Ministry of East
African Community, your Minister has requested you to prepare an itemized budget for this event paying due
attention to requisite conventional public budget formats. [25 points]
Question 4
Below are the balance sheet and income statement of Tocland Limited for the period ended 31 December 2022
(in US$ thousands):
BALANCE SHEET
INCOME STATEMENT
Cash
Accounts Receivable
Inventories
Current Assets
Net Fixed Assets
Total Assets
$
400
1,300
2,100
$ 3,800
3,320
$ 7,120
Accounts Payable
Accruals
Short-term Loans
Current Liabilities
Long-term Debt
Shareholder's Equity
Total Liabilities and Shareholder's Equity
$
320
260
1,100
$ 1,680
2,000
3,440
$ 7,120
Net Sales
$ 12,680
Cost of Goods Sold
8,930
Gross Profit
$ 3,750
Operating and Administrative Expenses
2,230
Interest Expense
460
Profit Before Taxes
$ 1,060
Taxes
390
Net Profit
$
670
On the basis of this information, compute and interpret the following financial ratios:
(a) current ratio. [5 points]
(b) acid-test ratio. [5 points]
(c) gross profit margin. [5 points]
(d) net profit margin. [5 points]
(e) return on investment. [5 points]
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FINAL EXAMINATION
FINANCIAL PLANNING AND BUDGETING: SED 626
Question 5
Below are the balance sheets and income statements of Tocland Limited over the last three years ended
December 31st (in US$ thousands):
BALANCE SHEET
2020
2021
2022
Cash
Accounts Receivable
Inventories
Current Assets
Net Fixed Assets
Total Assets
$
561
1,963
2,031
$ 4,555
2,581
$ 7,136
$
387
2,870
2,613
$ 5,870
4,430
$ 10,300
$
202
4,051
3,287
$ 7,540
4,364
$ 11,904
Accounts Payable
Accruals
Bank Loans
Current Liabilities
Long-term Debt
Shareholder's Equity
Total Liabilities and Shareholder's Equity
$ 1,862
301
250
$ 2,413
500
4,223
$ 7,136
$ 2,944
516
900
$ 4,360
1,000
4,940
$ 10,300
$ 3,613
587
1,050
$ 5,250
950
5,704
$ 11,904
INCOME STATEMENT
2020
2021
2022
Net Sales
Cost of Goods Sold
Gross Profit
Operating and Administrative Expenses
Interest Expense
Profit Before Taxes
Taxes
Net Profit
$ 11,863
8,537
$ 3,326
2,276
73
$ 977
390
$ 587
$ 14,952
11,124
$ 3,828
2,471
188
$ 1,169
452
$ 717
$ 16,349
12,016
$ 4,333
2,793
200
$ 1,340
576
$ 764
(a) Using the index analysis, evaluate trends in Tocland Limited’s financial condition citing specific
ratio levels and trends as evidence. [15 points]
(a) Identify and describe some of the significant problems in Tocland Limited ’s financial condition citing
specific ratio levels as evidence. [10 points]
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FINAL EXAMINATION
FINANCIAL PLANNING AND BUDGETING: SED 626
Question 6
Describe by way of examples the following inherent financial risks as they apply to Asset Liability
Management (ALM):
(a) Market risk. [5 points]
(b) Foreign exchange risk. [5 points]
(c) Interest rate risk. [5 points]
(d) Liquidity risk. [5 points]
(e) Credit risk. [5 points]
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