Accounting And Finance Assesment Report

Running head: ACCOUNTING AND FINANCE
Accounting and Finance
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING AND FINANCE
Table of Contents
Answer to question 1:......................................................................................................................3
Part (a):........................................................................................................................................3
Part (b):........................................................................................................................................3
Sub part (i):..............................................................................................................................3
Sub part (ii):.............................................................................................................................4
Part (c):........................................................................................................................................5
Sub part (i):..............................................................................................................................5
Sub part (ii):.............................................................................................................................6
Answer to question 2:......................................................................................................................6
Part (a):........................................................................................................................................6
Sub part (i):..............................................................................................................................6
Sub part (ii):.............................................................................................................................7
Sub part (iii):............................................................................................................................7
Sub part (iv):............................................................................................................................7
Part (b):........................................................................................................................................7
Answer to question 3:......................................................................................................................8
Part (a):........................................................................................................................................8
Sub part (i):..............................................................................................................................8

2ACCOUNTING AND FINANCE
Sub part (ii):.............................................................................................................................9
Part (b):........................................................................................................................................9
Part (c):........................................................................................................................................9
Sub part (i) & (ii):....................................................................................................................9
Sub part (iii):..........................................................................................................................10
Part (d):......................................................................................................................................10
Sub part (i) & (ii):..................................................................................................................10
Sub part (iii):..........................................................................................................................11
Sub part (iv):..........................................................................................................................11
Sub part (v):...........................................................................................................................11
Sub part (vi):..........................................................................................................................12
Sub part (vii):.........................................................................................................................12
Sub part (viii):........................................................................................................................12
Sub part (ix):..........................................................................................................................13
Sub part (x):...........................................................................................................................13
References and bibliography:........................................................................................................14

3ACCOUNTING AND FINANCE
Answer to question 1:
Part (a):
Total number of years to the date of admission (n) = 5
Annual rate of interest (i) = 4% (monthly compounded)
Future Value of an annuity due (FV) = PMT ×
( (1+ 4 %
12 )5× 12
−1
4 %
12 )=$ 60000
Amount to be deposited annually (PMT) =
$ 60,000
( (1+ 4 %
12 )5× 12
−1
4 %
12 )=$ 904.99
Part (b):
Sub part (i):
End of year Cash flow ($mil) Present Value Factor PV of cash flow ($mil)
1 1.8 1
( 1+ 10 % ) 1 1.64
2 3.0 1
( 1+ 10 % ) 2 2.48
3 6.5 1
( 1+ 10 % ) 3 4.88
4 8.4 1
( 1+ 10 % ) 4 5.74