Offered two investments for the firms spare cash

Assignment Help Financial Management
Reference no: EM131309798

You are offered two investments for the firm's "spare cash" ($8000). Which option will give you a better return on and of investment (two ROIs)? Option 1- pays out at 16% simple interest for five years   Option 2- pays out at 11% compound interest for four years

Reference no: EM131309798

Questions Cloud

Why there is a need of change : 1. Why there is a need of change? 2. With reference to your company, what changes you prefer?
What is the firm net float : ABC Company writes 394 checks a day for an average amount of $697 each. These checks generally clear the bank in 4 days. In addition, the firm generally receives an average of $151,031 a day in checks that are deposited immediately. Deposited funds a..
Explain how this disease and the management of it affect : Identify the disease or subject of focus.Identify the population.Focus your information on the specific cultural beliefs of the population that you have chosen and how treatment and management of the disease might be affected by these aspects.Expla..
Type of corporate compliance processes : If you were the CFO of the facility, what type of corporate compliance processes would you have in place? Which federal statutes would you include in your compliance process? What types of skills would you look for in the person that keeps up wi..
Offered two investments for the firms spare cash : You are offered two investments for the firm's "spare cash" ($8000). Which option will give you a better return on and of investment (two ROIs)? Option 1- pays out at 16% simple interest for five years   Option 2- pays out at 11% compound interest fo..
The remainder is bad debts and is not collected : ABC Company has the following projected sales: Month Sales $ April 34,972 May 38,440 June 37,490 July 17,614 ABC collects 64 percent of its sales in the month of sale, 20 percent in the month following the month of sale, and another 1 percent in the ..
What is the history on driver requirements and laws related : What is the history on driver requirements and laws related.- Pick a transportation topic covered and provide additional research on the topic expanding on the basics from the book.
What is the expected rate of return on stock : Steady As She Goes Inc. will pay a year-end dividend of $3.10 per share. Investors expect the dividend to grow at a rate of 5% indefinitely. If the stock currently sells for $31 per share, what is the expected rate of return on the stock? If the expe..
What part of trend-lines value is due to assets in place : Trend-Line Inc. has been growing at a rate of 4% per year and is expected to continue to do so indefinitely. The next dividend is expected to be $6 per share. If the market expects a 12% rate of return on Trend-Line, at what price must it be selling?..

Reviews

Write a Review

Financial Management Questions & Answers

  The gekay company’s guano project

As the newly appointed Director of Finance at the GeKay Company, Chris Doyle is about to analyze a proposal that the firm has been considering for developing guano as a garden fertilizer – the “guano project”.

  What is the quarterly payment

Ramco borrows $1,769,000 for a new machine at an interest rate of 4.8I% APR compounded weekly. What is the quarterly payment if it owes $450,000 9 years from now?

  Decision using the principle of the time value of money

Most states have turned to the lottery to raise money for education and other state financing needs. Determine the largest payout for the state in which you reside. Explain the options for receiving the money and select the method you would choose. P..

  Construct stephensons market value balance sheet

Stephenson Real Estate Company was founded 25 years ago by the current CEO, Robert Stephenson. The company purchases real estate, including land and buildings, and rents the property to tenants. The company has shown a profit every year for the past ..

  What is the present value of a payment

If the interest rate this year is 8.8% and the interest rate next year will be 10.8%, what is the future value of $1 after 2 years? What is the present value of a payment of $1 to be received in 2 years?

  Define financial risk

Should the investor select the origination LTV that maximizes the IRR on equity? Explain why or why not.

  Make all future deposits on the first day of the year

Two sisters each open IRAs in 2011 and plan to invest $3,000 per year for the next 30 years. Mary makes her first deposit on January 1, 2011, and will make all future deposits on the first day of the year. Jane makes her first deposit on December 31,..

  Investors with a perception of the least amount of risk

Assume that asymmetric information exists in the financial markets. If a firm's earnings fluctuate every year, everything else equal, which if the dividend policies discussed in CH 13 should be followed to provide investors with a perception of the l..

  Most likely result in a quick increase in market share

Bit's product manager is under pressure to increase market share, but is uncertain about how to make the product more competitive. The product is reasonably well-positioned in the Thrift segment and enjoys relatively high awareness and accessibility...

  Pension fund you are managing is expecting inflow of fund

Frontier Bank offers one-year loans with a stated rate of 7.5 percent, charges a 1/4 percent loan origination fee, imposes a 5 percent compensating balance requirement, and has a 10 percent reserve requirement. Suppose that the pension fund you are m..

  Target debt—equity ratio

Sixx AM Manufacturing has a target debt—equity ratio of 0.54. Its cost of equity is 18 percent, and its cost of debt is 11 percent. If the tax rate is 32 percent, what is the company's WACC?

  Calculate the cost of preferred stock

Meacham Corporation wants to issue bonds with a 9% coupon rate, a face value of $1,000, and 12 years to maturity. Meacham estimates that the bonds will sell for $1,090 with issuing (flotation) costs equal $15 per bond—this reflects an 8% before tax c..

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