Example on financial and managerial accounting, Financial Accounting

Assignment Help:

Mr N. M. is lucky to have a lottery prize of Rs 20 million. He does not have any liability and does not have any claimant over this money. He has the following alternatives:

(i) Give this money to his friend who agrees to pay Rs 20 million at the end of 1st year and Rs 5 million at the end of 2nd year;

(ii) Give this money to his brother who agrees to pay Rs 10 million per annum for three years.

(iii) Invest the money in a business with an expectation to get Rs 5 million every year for 15 years.

(iv) Exchange this money with the money which his friend Shyam is to inherit in 20 years. Shyam expects to inherit Rs 50 million.

1. In your views, which alternative is more profitable?

2. What additional information is required in order to take a decision?


Related Discussions:- Example on financial and managerial accounting

Abbreviated cash budget, I need to know how to do a problem and whether I ...

I need to know how to do a problem and whether I am missing information.

Calculation of leverage ratios, Calculation of Leverage ratios  - ...

Calculation of Leverage ratios  -                     2008 2009 2010 U EBIT or Oper

Objectives, what are the types and objectives of international accounting s...

what are the types and objectives of international accounting standersds?

Business start up accounting transactions, Business start up accounting tra...

Business start up accounting transactions: Jane Whitfield, a sole proprietor, established the JW Flower Shop on January 2, 2010. The following transactions have occurred during

Internal control over financial reporting, Q. Internal Control Over Financi...

Q. Internal Control Over Financial Reporting? Internal Control Over Financial Reporting - A process designed by, or under supervision of company's principal executive and princ

What type of an asset is goodwill, What kinds of risks does a firm like Ama...

What kinds of risks does a firm like Amazon.com face with respect to safeguarding its assets? What types of controls do you think it already has in place to minimize these risks? G

Illustration-statement of changes in net assets-pension fund, Illustration-...

Illustration-statement of Changes in Net Assets-pension fund (a) What meetings of creditors must be held and for what purpose in the course of a creditors’ voluntary winding up

Mini-max system, In this method the minimum and maximum level for all items...

In this method the minimum and maximum level for all items of inventory are fixed. These levels function as an origin for initiating action so that the quantity of all items is con

What is the present value, What is the present value of $500 per year for t...

What is the present value of $500 per year for ten years at 12 percent, assuming a regular, or ordinary annuity?

Write Your Message!

Captcha
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