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Financial Management: Investment Options, IPO Process, and Discount Calculation

   

Added on  2019-09-23

4 Pages596 Words452 Views
Financial Management

Q2. The 5% discount is offered by the supplier. The discount can be received within 15 days. If the discount is not received then, the amount will be paid within 60 days.Q4. Three options for investment:Following are the three options with its working and reasons:1.Open a Roth IRAWorkingThere are two types of IRA, namely, traditional IRA and Roth IRA.Traditional IRA gives the tax deduction on the contributed amount. For example, an individual with the age of 49 can contribute maximum $5,500 in 2015 (Dolvinet al., 2014). The tax has to be paid on the income earned from the mandatory distributions but not longer than the age of 70.5.A Roth IRA has no upfront tax benefit, but it has incredible back-end benefit. There is no tax on the capital gains till the unqualified withdrawals. There is no regulation on the distribution by the age of 70.5. The account holder has the choice to letting time and the magic of principle of compounding.ReasonsIt owes nothing on the capital gains taxes till the account holder does not make any unqualified withdrawals. There are no regulations requiring by the age of 70.5.2.Open an account of stock investmentWorkingIt is the investment of funds in the electronically traded funds which represents the particular sector. The minimum investment account provides an incredible diversity of funds (Gottschlich et al., 2014). ReasonsIt is the consistent generator of wealth in the long run and has short term investments. Forexample money market accounts.3.Corporate bondsWorkingThe corporate bonds provide an inflation topping coupon rate which bound to make income seeking investors smile.ReasonsIt provides the steady return on the investment with a great chance of preservation of capital (Asquith et al., 2013).Q5. Process of IPOIt is the first sale of the stick by an organization. Following are the steps of Initial public offerings:

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