Accounting and Finance

Running head: ACCOUNTING AND FINANCE
Accounting and finance
Name of the Student
Name of the University
Author Note

1
ACCOUNTING AND FINANCE
Table of Contents
Answer to Question 1:................................................................................................................2
Part a:.....................................................................................................................................2
Part b:.....................................................................................................................................2
Part c:.....................................................................................................................................2
Answer to Question 2:................................................................................................................3
Part i:......................................................................................................................................3
Part ii:.....................................................................................................................................3
Answer to question 3:.................................................................................................................3
Answer to Question 4:................................................................................................................4
Part i:......................................................................................................................................4
Part ii:.....................................................................................................................................5
Part iii:....................................................................................................................................5
Part iv:....................................................................................................................................6
Part v:.....................................................................................................................................6
Part vi:....................................................................................................................................6
Part vii:...................................................................................................................................7
Part viii:..................................................................................................................................7
Part ix:....................................................................................................................................7
References list:...........................................................................................................................8

2
ACCOUNTING AND FINANCE
Answer to Question 1:
Part a
The amount which Sandy needs to pay in order to gain an opportunity for the investment is $
1904.76. The calculation of the present value of the cash flow is given below:
Q.a:
End of year Cash Flow
Interest
Rate
Discounted
Cash Flow
1 400 9% 366.97
2 800 9% 673.34
3 500 9% 386.09
4 400 9% 283.37
5 300 9% 194.98
1904.76Present Value
Part b
Q.b:
Particulars Amount
Loan Amount A 100000
Interest Rate p.a. B 10%
Nos. of Payments p.a. C 4
Quarterly Interest Rate D=B/C 2.50%
Total Nos. of Payments E 20
Amount of Quarterly Payment F=(DxA)/[1-(1+D)^-E] 6414.71

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ACCOUNTING AND FINANCE
Part c
Q.c:
Particulars Amount
Investment Value A $2,00,000
Interest Rate p.a. B 10%
Nos. of Compounding Periods
p.a. C 12
Monthly Interest Rate D=B/C 0.83%
Total Period (in years) E 2
Total Compounding Periods F=CxE 24
Investment Value after 2 years G= A x (1+D)^F $2,44,078.19
Nos. of Monthly Payments H 150
Amount of Monthly Payments I= (GxD)/[1-(1+D)^-H] $2,856.69
Answer to Question 2:
Part i
Q.2
%
Year
CFi 10000 0
6% 7%
6 7 8 9 10
0 0 -2500 0 0
5
8%
3
$1500
4
$0
0
$0
1 2
$6500