Comparing buy the note versus leaving money

Assignment Help Financial Accounting
Reference no: EM132531687

Suppose someone offered to sell you a note calling for the payment of $1,000 in 15 months. They offer to sell it to you for $850. You have $850 in a bank time deposit that pays a 6.76649% nominal rate with daily compounding, which is a 7% effective annual interest rate, and you plan to leave the money in the bank unless you buy the note. The note is not risky-you are sure it will be paid on schedule. Should you buy the note? Check the decision in three ways:

Question (1) by comparing your future value if you buy the note versus leaving your money in the bank;

Reference no: EM132531687

Questions Cloud

What is the equivalent annual cost of buying the new printer : Printing Services is considering replacing,What is the equivalent annual cost of buying the new printer and what is this cost's interpretation?
Cybercrime-cybersecurity and financial institutions : Identity theft laws, contract laws, copyright infringement laws, trade secret laws, etc.) or even state level. Consider the need for international laws
Explain the benefit of diversification : Would you prefer to invest in the portfolio, in stocks only, or in bonds only? Explain the benefit of diversification.
What is the amount of the impairment loss : If the fair value of Christler's assets is $2.1mm, their book value is $2.4mm and their market value is $2.2mm, then what is the amount of the impairment loss
Comparing buy the note versus leaving money : Suppose someone offered to sell you a note calling,By comparing your future value if you buy the note versus leaving your money in the bank
Average return on both the fund and the index : In a recent 5-year period, mutual fund manager Diana Sauros produced the following percentage rates of return for the Mesozoic Fund. Rates of return
Compare artificial and biological neural networks : Compare artificial and biological neural networks. What aspects of biological networks are not mimicked by artificial ones? What aspects are similar?
How much equipment did plymouth company purchase : Total depreciation expense for the year was $600. How much equipment did Plymouth Company purchase during the year? Write the dollar amount of your answer
What was the risk premium on common stock in each : Assume these are the stock market and Treasury bill returns for a 5-year period:

Reviews

Write a Review

Financial Accounting Questions & Answers

  Cost accumulation and allocation

Determine the total estimated cost of the products made in Departments M and N. Assume that Maller produced 2,000 units of Product M and 4,000 units of Product N during the year.

  Record entry for any items on bank reconciliation statement

Make a bank reconciliation statement for the firm as of March 31, 2019. Record entries for any items on the bank reconciliation statement.

  Bonds with a face value-present value of the principal

On January 1, 2010, Ellison Co. issued 8-year bonds with a face value of $1,000,000 and a stated interest rate of 6%, payable semi annually on June 30 and December 31. The bonds were sold to yield 8%. Table values are as follows:

  Depreciation on a residential rental building costing

he first year of depreciation on a residential rental building costing $200,000 purchased May 2, 2014. The second year of depreciation on a computer costing $3,000 purchased in May 2013, using half-year convection and accelerated depreciation.The thi..

  Inferring costing method-unit product cost

Inferring Costing Method; Unit Product Cost (LO1) Amcor, Inc., incurs the following costs to produce and sell a single product

  An audit trial balance enables person to trace

An audit trial balance enables a person to trace a source document to its ultimate effect on the financial statement or work back from financial statement amounts to source documents. Describe in DETAIL the audit trail for the following: a) Purchases..

  By what amount will fink paid-in capital

Mitchell's usual billing rate is $700 per hour, and Fink's stock has a book value of $250 per share. By what amount will Fink's Paid-in capital - excess of par increase for this transaction?

  What was the addition to retained earnings last year

If the company paid $1.00 per share to its common stockholders, Determine what was the addition to retained earnings last year?

  Weighted-average process-costing system

Peach Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 40,000 units during the month and had 10,000 units in process at month-end, 20% complete.  If conversion is incurred uniformly throughout ..

  The following data relate to genmet a us based consumer

the following data relate to genmet a u.s. based consumer goods manufacturing firm for the fiscal year ending 31st

  Explain decision of government that no specific regulation

HA 3011 Advanced Financial Accounting Assignment - You are required to explain the decision of the government that no specific regulation

  Analysis of financial statements and comment on performance

Analysis of its financial statements and comment on its performance as one of the stakeholder groups (eg: investors/prospect investors, employees and etc)

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd