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Finance Case Study - (Doc)

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Added on  2020-10-05

Finance Case Study - (Doc)

   Added on 2020-10-05

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FINANCE: CASE STUDY
Finance Case Study - (Doc)_1
Table of ContentsINTRODUCTION ..........................................................................................................................3TVM AND BOND VALUATION QUESTION ............................................................................3a) Cash receives from case company .........................................................................................3b) Annual operating revenue ......................................................................................................3c) EAR of the loan option ..........................................................................................................4d) Quarterly payment made by the company..............................................................................4e) Yield to maturity of the Bond ................................................................................................4f) Amount of coupon payment....................................................................................................5RISK AND RETURN ESTIMATES...............................................................................................5RISK AND RETURN ANALYSIS.................................................................................................7CONCLUSION................................................................................................................................8REFERENCES ...............................................................................................................................9
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INTRODUCTION Finance is required to perform the various business activities. It consists of equity anddebts which are the source finance used by the business. In this assignment, It will provideinformation about the various option available for the organisation to be used for funding theiroperations. In this report MYOB is considered which provide tax and other services. It will assistin determining the cost of equity, time value of money and bond valuation etc.TVM AND BOND VALUATION QUESTION a) Cash receives from case company Time value of moneyyears Monthly Instalment yearly instalmentdiscounting factor @7%cash flows 126.2314.40.93293.20226.2314.40.87273.44326.2314.40.81255.00426.2314.40.76237.81Time value of money1059.5From the above calculation it can be interpreted about the time value of money. It isidentified that the monthly instalment for the sale made by the company were 26.2 which isrequired to be paid by the customers on the basis of 4 years. The discounting factor at the rate7% is calculated which assisted in identifying the cash flows for the period (Brooks, 2019). Thefuture value of the cash which will be paid by the customer is equal to 1059.5. b) Annual operating revenue Annual operating revenue in 5 years particular Amount ($)Total revenue 445.2growth rate (%)0.101growth after 1 years 490growth after 5 years 2451
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