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Accounting and Finance Assignment - Doc

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Added on  2020-02-24

Accounting and Finance Assignment - Doc

   Added on 2020-02-24

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ACCOUNTING &FINANCE STUDENT_ NUMBER
Accounting and Finance Assignment - Doc_1
Question 1 (a)FVA = $10,000 R=10%p.a.¿R=5%halfyearlyC=$800N=?Total size of concluding payment ¿?Formula for FVA:FVA=C∗[(1+R)N−1]R10,000=800∗[(1+5100)N−1]5100N=(ln1.625)(ln1.05)=9.95Total number of full payment would be 9. Total size of concluding payment = 800* 9.95 = $7961. (b)Initial investment ¿200000−20000=$180,000Interest rate R=10%1
Accounting and Finance Assignment - Doc_2
Interest amount (peryear¿¿180000∗10%=$18000Interest amount (for all four years) = 4 * Interest amount (peryear¿¿18000∗4=$72,000At the end of the 4 year the total amount would be computed as ¿180000+72000=$252,000Time = 180 monthsMonthly interest rate R=1012%252000=P∗[1−(1+(101200))−180](101200)P=$2697.2Hence, monthly payment P=$2697.2(c)FVA=?C=$4000R=5%peryearN=11 Years 2
Accounting and Finance Assignment - Doc_3
FVA=4000∗[(1+0.05)11−1]0.05=$56,827.2The total amount which Dr. Ritz would have at the end of December 2017 is $56,827.2(d)Amount offered to Mary Tune = $150,000 Rate (discount) = 6%Total cash flows for the ten years = $20,000Time = 10 years Present value of cash flows for the respective years is given below:“Present value of the future cash flow” = $147,202 It can be seen from the above that present value of future cash flow is smaller than the total amount offered ($150,000) to Mary Tuna. Hence, it would be profitable to Mary Tuna to sell her future rights. 3
Accounting and Finance Assignment - Doc_4

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