Reference no: EM132652138

Not surprisingly, you were hired as a finance manager at Alfajores Havanna's first US-based office. One of your first assignments is to help the local team assess the company's current investments. See below for a series of items you've been asked to analyze.

1. The company has an opportunity to invest $400,000 at 4% interest, compounded annually. If the company proceeds with this investment and leaves the balance untouched, how much money will there be in the account at the end of 5 years?

2. You notice upon reviewing another account that it has a balance of $100,000. If the initial deposit in this account was made 3 years ago, and the market rate is 3% (compounded annually), what was the initial deposit?

3. The person who held your role prior to you being hired had the opportunity to invest $50,000 to purchase an investment that would have paid 7% a year, compounded annually, for 4 years. This person decided the investment wasn't a good option and put the money in a supply closet instead. What is the opportunity cost, in dollars, to the company of not having invested these funds?