Financial Management: Solved Assignments and Essays

Financial
Management

FINANCE 1
Question 1
1.1
Given
Investment Outplay (Present
Value) $2 Million
Selling $2.18 million
Interest rate 10%
N 1
R 10% or 0.10
FV PV(1+R)n
200000*(1+0.10)1
FV of CD 220000
1.2
As per the evaluation, it is observed that the FV of CD is high such as 220000 as compare to the
FV of Painting. Investment in painting is not a good idea for the company in terms of
investment.
1.3
Data Given

FINANCE 2
PV (Investment Cost) 200000
N 1
FV 218000
ROI Gain
Investment Cost
218000-200000
200000
ROI 18000
200000 9%
Question 2
2.1
Given
Cash Flow in 1st year $114
Cash Flow in 2nd year $44
Rate of Return 20%
Number of Periods (n) 2
R 10% or 0.10

FINANCE 3
PV
PV(nper, rate, pv,
pmt)
PV in first year $174.17
PV in second year $67.22
2.2
This investment is not acceptable as its initial outlay is high as compare to the future value
(Calculator, 2018). It is observed that the investor can face the loss due to high amount of
investment and less amount of return.
Question 3
3.1
Given
Present Value ?
Years 7
Interest Rate 13%
FV 498
PV(nper, rate, fv pmt)
PV $211.68