User Account

All Pages

What of the interest rate on the five-year bond

Assignment Help Financial Accounting
Reference no: EM132930711

Problem - Time Value of Money -

1. At the beginning of your freshman year in college, your favorite uncle, Lito deposited $10,000 into your four-year bank certificate that pays 5% annual interest. You will only receive the money in the account (including the accumulated interest) if you gradute with honors. How much will there be in the account after four years?

2. Supposed a Ph government bond promises to pay P22,497.30 three years from now. If the going interest rate on 3-yr government bonds is 4%. How much is the bond worth today? How would your answer change if the bond matured 5 years rather than 3 years? What of the interest rate on the 5-year bond was 6% and not 4%?

3. You just won the Kopiko Super Milyonaryo Raffle. To receive your winnings, you have to select on the below choices:

A. You can receive the P1,000,000 a year at the end of each year in the next 30 years; or

B. You can receive a one-time payment of P15,000,000 today.

Assume the current interest rate is 6%. Which option is most valuable?

Reference no: EM132930711

Questions Cloud

What would be the value of the options : Assume you have been given the following information on Purcell Industries: Using the Black-Scholes Option Price Model, what would be the value of the options
How the transactions should be recorded in the books : Prepare journal entries to show how the transactions should be recorded in the books of Exchanger Limited for the year ended 31 December 2019.
Why applying the principles of ifrs is a good example : Critically discuss the concept of 'substance over form' and explain why applying the principles of IFRS 16 is a good example of the concept being applied.
Explain the theory that is based on bursa malaysia filings : Based on your understanding of dividend theories, explain the theory that is Based on Bursa Malaysia filings, the large caps- companies.
What of the interest rate on the five-year bond : How would your answer change if the bond matured 5 years rather than 3 years? What of the interest rate on the 5-year bond was 6% and not 4%
Discuss how can relate investors expectations with the tax : The shareholders have diverse views, Discuss how can relate investors' expectations with "The Tax Preference Theory" and "Bird-in-the-hand Theory".
Discuss the expected year-end stock price : The new recapitalization plan would require company to repurchase. Explain the expected year-end stock price if the company proceeded with the recapitalization.
Discuss effect of risk and return due to the restructuring : Discuss effect of risk and return. What would be Sunniaga's estimated cost of equity if it changed its capital structure to 50% debt and 50% equity?
What the carrying amount of furniture at December : Takatak, Inc., uses the group depreciation method for its furniture account. What the carrying amount of furniture at December 31, 2018

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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