Accounting and Finance: Investment Analysis and Australian Taxation

This assignment solution covers several key areas in accounting and finance, including investment analysis using discounted cash flow methods, loan amortization calculations, and the impact of corporate tax rates on investment decisions in Australia. It addresses the calculation of present values for a stream of cash flows, determination of quarterly loan payments, and future value calculations considering monthly compounding. Furthermore, it analyzes investment returns and risks associated with specific stocks (NAB and BHP) and the broader market index (AORD), utilizing concepts such as standard deviation, beta, the Capital Asset Pricing Model (CAPM), and the Security Market Line (SML) to evaluate portfolio performance. The assignment also discusses the Australian government's policy to reduce corporate tax rates and its potential effects on investment, national income, and international competitiveness, considering the dividend imputation system and its implications for both local and foreign investors. The analysis concludes with recommendations on portfolio construction to diversify risks and optimize returns based on CAPM and SML computations.