Compute what is the value of the investment today

Assignment Help Financial Accounting
Reference no: EM132721160

You are saving up to start a new business venture and will need to accumulate $20,000. You figure you will have to work in your current job for three more years to save enough money and get more experience. You have $5,000 you can deposit now. Additionally, you will be able to deposit $3,000 at the end of each year for the next three years. ALL deposits earn 4% interest with quarterly compounding. I suggest using a time line to help with the periods. Show your work to receive partial credit.

Problem a. How much will you have at the end of the 3 years?

Problem b. If you did Part A correctly, you will find out you do not have enough money to start your company. There are at least 4 things you can do to get you can do to get you closer to this goal. (Identify and Explain the concepts behind three of them)

Problem c. You will be receiving a payment of $5,000 in three years. You feel an 8% required rate of return is appropriate. What is the value of this investment today?

Problem d. Assume your required rate of return rose from 8% in Part C to 10% due to inflation fears. How would your answer?

Reference no: EM132721160

Questions Cloud

Prepare the journal entry in the books of krypton industries : KI settles the option for cash when the option value in the market is $12,000. Prepare the journal entry in the books of KI, if required, to record transaction
What is the taxable income for Mr Martin : Mr. Martin owns investment in various corporations. At this time the shares are trading at $20 per share. What is the taxable income for Mr. Martin
Violation of the general duty clause : The OSHA Field Operations Manual (FOM) describe a situation that could be cited as a violation of the General Duty Clause
Mobbings applied in large and small businesses : What are the mobbings applied in large and small businesses? What are the effects of these on employees?
Compute what is the value of the investment today : Compute What is the value of investment today? You will be receiving a payment of $5,000 in three years. You feel an 8% required rate of return is appropriate.
Discuss the impact of cultural change : From the strategy execution perspective, discuss the impact of cultural change with illustrations from cases of your choice.
Which research analysis was used : Write 3 annotated bibliography assignments on HR. Each annotated bibliography should be one page each. The reason the study was conducted.
Explain great man theory of the 19th century : Explain this theory to us. In your opinion is this a desirable and relevant theory and have you seen it used? Explain your rationale for your point of view.
How do find required earnings per share : How do Find required earnings per share (EPS); the standard deviation of EPS; and the coefficient of variation of EPS for each of the three capital structures.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial accounting theory

prepare an essay which demonstrates their understanding about the issue

  Prepare consolidated net income and show all the work

Musical earned $308,000 in net income 2011(not including any investment income) while martin reported $126,000. Assume there is no amortization related to the original investment. Prepare consolidated net income for 2011 and show all the work.

  Prepare the journal entry to record the issuance

Prepare the journal entry to record the issuance (sale) of the bonds - Prepare the journal entry to record the first payment of interest

  Companys repayment be if you issue the coupon bonds

Suppose your company needs to raise $44 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent, and you’re evaluating two issue alternatives: A 8 percent semiannual coupon bond an..

  Explain the impact of a tax shield on fixed income yields

Utilizing the information from valid sources, briefly compare the coupon rate and the interest rate regarding bonds. What is a par value?

  Estimate of the total misstatement in? inventory

You are evaluating audit results for assets in the audit of HalosHalos Manufacturing. You set the preliminary judgment about materiality at $50,000. Assume you tested inventory amounts totaling $1,250,000 and found $12,500 in overstatements. Ignoring..

  Account ament in parentheses is to be debited or credited

For each transaction, determine whether the account ament in parentheses is to be debited or credited

  Should the firm purchase the machine

The firm has determined the cost of capital (or minimum required rate of return) as 10 percent after taxes. Should the firm purchase the machine? Use the NPV method.

  Find what was most recent dividend paid by the company

If the market price of the stock is $18 per share and its dividends have been growing at a constant rate of 6%, what was the most recent dividend paid?

  What amount building reported on consolidate balance sheet

At what amount is the building reported on the consolidated balance sheet? Bower Inc acquired 60% of the outstanding stock of Menda Company.

  Identify statement of cash flows for publicly traded company

Identify the statement of cash flows for a publicly traded company. Identify two items on the statement of cash flows that are important to consider

  Calculate EAR for Royal Grandora Bank and First United Bank

Calculate the EAR for Royal Grandora Bank and First United Bank. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

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