ACC515 Accounting & Finance
Added on 2020-03-01
11 Pages1861 Words62 Views
Running head: ACCOUNTING & FINANCEAccounting & FinanceName of the UniversityName of the studentAuthors note
1ACCOUNTING & FINANCETable of ContentsAnswer to Question 1:................................................................................................................2Requirement a:.......................................................................................................................2Requirement b:.......................................................................................................................2Requirement c:.......................................................................................................................2Requirement d:.......................................................................................................................3Requirement e:.......................................................................................................................3Answer to Question 2:................................................................................................................4Requirement 1:.......................................................................................................................4Requirement 2:.......................................................................................................................4Answer to Question 3:................................................................................................................5Requirement i:........................................................................................................................5Requirement ii:.......................................................................................................................6Requirement iii:......................................................................................................................7Requirement iv:......................................................................................................................7Requirement v:.......................................................................................................................8Requirement v:.......................................................................................................................8Requirement vi:......................................................................................................................9Requirement vii:.....................................................................................................................9Requirement viii:....................................................................................................................9Reference:................................................................................................................................10
2ACCOUNTING & FINANCEAnswer to Question 1:Requirement a:Requirement b:ParticularsAmountTotal Value of LotteryA$200,000Initial WithdrawB$20,000Investment ValueC=A-B$180,000Rate of Interest p.a.D10%Deferred Period (in years)E4Future Investment Valueafter 4 yearsF=Cx(1+D)^E$263,538Monthly Rate of InterestG=D/120.83%Nos. of Monthly PaymentsH180Size of Equal PaymentsI=(GxF)/[1-(1+G)^-H]$2,832Requirement c:ParticularsAmountAnnual DepositA$4,000Interest Rate p.a.B5%Nos. of DepositsC11ParticularsAmountTotal Fund DesiredA$10,000Periodic PaymentsB$800Interest Rate p.a.C10%Nos. of Payments p.a.D2Compound InterestE=C/D5.00%Total nos. of PaymentsF=NPER(E,B,0,(-A))9.95Nos. of Full PaymentsG=F-0.959Size of Concluding PaymentH=Bx(F-G)$760
3ACCOUNTING & FINANCETotal Deposit Amount in 2017D=(1+B)xA[{(1+B)^C-1}/B]$59,669Requirement d:The table, given below, exhibits that the singer would suffer loss for selling the rightsnow.ParticularsAmountAnnual PaymentA$20,000Interest Rate p.a.B6%Nos. of DepositsC10Present Value of the TotalPaymentsD=(1+B)xA[{1-(1+B)^-C}/B]$156,034Current Sale Price of FutureRightsE$150,000Loss on SalesF=E-D($6,034)Requirement e:PeriodGrowth in AnnualPaymentsAnnualAnnuityDiscount RateDiscountedAnnuityABCD E=C/((1+D)^A)10%$1,00012%$893210%$1,10012%$877310%$1,21012%$861410%$1,33112%$846510%$1,46412%$831610%$1,61112%$816710%$1,77212%$801810%$1,94912%$787910%$2,14412%$7731010%$2,35812%$759Cost of Annuity$8,244
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