How the time value of money might take on importance

Assignment Help Finance Basics
Reference no: EM13860406

1. How do you explain the use of time value of money (TVM) in business? What considerations are made when calculating TVM? How may you use TVM to create your own, or someone else's, retirement plan?


2. Give three examples of how the time value of money might take on importance in business decisions.

3. Supposed you consider depositing your savings $10,000 in one of the 3 banks, all of which pay 10% interest; bank A compounds annually, bank B compounds semiannually, and bank C compounds daily. Which bank would you choose? Why? (Please show the details of your calculation.)

4. Say Mary wins $10 million. The lottery agency offers her a choice: take $500,000 per year over 20 years or take a one-time lump-sum payout of $6,700,000. Assume discount interest rate is 3%, which option shall Mary choose in order to gain the greatest value

Reference no: EM13860406

Questions Cloud

Environmental procedures adhered to within the industry : Critical evaluation and comments by the student on the usefulness of the training and its relevance to university education, Safety and environmental procedures adhered to within the industry.
Plot turbulence intensity profiles for velocity components : Plot the turbulence intensity profiles for the velocity components and compare the results from (c) with the actual Durst curve assuming the mean speed is like an hourly speed.
Find the natural frequencies of the system : You decide to use Holzer's method to find the natural frequencies of the system and determine the mode shapes, and to construct a plot of total torque vs. a, over the frequency range where the mode frequencies exist.
Find the internal rate of return : Find the internal rate of return
How the time value of money might take on importance : Give three examples of how the time value of money might take on importance in business decisions
What''s robert lucas'' view on business cycle : 1.What's Robert Lucas' view on business cycle? Do you agree with his view? Why? 2. Define economic variables that are procyclical, countercyclical or acyclical. Are real wages, GDP, employment procyclical, countercyclical or acyclical? Why?
Dataset of two paired variables : Problem: Consider a dataset of two paired variables, X and Y that have the following properties:
Compute mason and ruths 2013 federal income tax payable : Compute Mason and Ruth's 2013 Federal income tax payable - Mason and Ruth are cash basis taxpayers and had the following items for 2013.
Briefly explain how collector current is obtain : With the aid of diagram, briefly explain how collector current is obtain if the transistor is connected in c-e configuration. How is phase reversal achieved between the input and output in the circuit

Reviews

Write a Review

Finance Basics Questions & Answers

  As the petals bike co completes plans for its new assembly

as the petals bike co. completes plans for its new assembly line of course they assemble bikes the designers have

  What is the bond refunding npv

What is the bond refunding's NPV? Should they refund the bonds?

  Investment analysis through incremental analysis

Investment Analysis through Incremental Analysis and compute the incremental net income of the investment for each year

  Explain how the money markets play a role

Explain how the money markets play a role in this relationship between the interest rates and the level of net working capital.

  List the eight influence tactics

List the eight influence tactics in terms of how they are used by students to influence their university instructors. Which influence tactic is applied most often? Which is applied least often, in your opinion? To what extent is each influence tac..

  Calculate the price of a share

You are given the following data: Stockholders' equity $3.75 billion, price or earnings ratio 3.5, common shares outstanding fifty million, and market or book ratio 1.9.

  Which will require additional financing

Cost of Credit Holiday Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 35; and it currently pays after 5 days and takes discounts. Holiday plans to expand, which will require additional financing. Assume 365 days in yea..

  The price of wxo is $35 on the option expiration date

Purchased four WXO 32 call option contracts at a quoted prices of $.34. What is your net gain or loss on this investment if the price of WXO IS $35 on the option expiration date?

  If your homeowners insurance premium is 1000 and your

if your homeowners insurance premium is 1000 and your deductible is 2000 what could be considered the strike price of

  What is the advantage of homemade leverage to shareholders

what is the advantage of homemade leverage to shareholders and how does the use of this leverage affect a

  Important part of postsecondary budgeting

An example is the difference between an appropriation and an encumbrance. Often, these two are confused with one another. Another important part of postsecondary budgeting includes the knowledge of fixed assets.

  Projects in all organizations have associated risks the

projects in all organizations have associated risks. the risks can be minimized when you are certain of the outcome and

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