Financial equivalent of the balance, Financial Management

Assignment Help:

The Federal Minister for the Environment is worried about the Greenhouse Effect, one outcome of which would be that Adelaide would have a subtropical climate by the year 2015. This would mean that Adelaide would be suited to growing bananas using a new cloned variety that can produce normal yields at the end of the second year of planting.

Equally the Federal Treasurer is worried about balancing the 2011 financial year budget. The two ministers have thus "cooked up" a plan to sell Edinburgh airfield (valued at $200 million) to a Queensland banana growing consortium. After intense negotiations the consortium has agreed to a down-payment (due at the beginning of 2011) of $50 million with the financial equivalent of the balance to be paid in equal annual instalments over 10 years with the first of these instalments due at the end of 2020.

The varieties of bananas that are currently grown are expected in 2020 to have a wholesale price of $40 for a box weighing about 20 kilograms. If the Edinburgh land is expected to produce 1,250,000 boxes of new variety bananas per annum, by how much would the consortium need to increase the wholesale price per kilogram of its bananas in order to pay the debt to the government if interest is j2 = 10% p.a.?

 


Related Discussions:- Financial equivalent of the balance

Case let, Which type of financing is appropriate to each firm

Which type of financing is appropriate to each firm

Cost of preference capital, Cost of Preference capital (K ) The fixed ...

Cost of Preference capital (K ) The fixed rate of dividend payable to the Preference share holders is the cost of Preference capital.  Exactly, the cost of Preference capital

Assignment, Hi, what is your time limits on providing solutions

Hi, what is your time limits on providing solutions

Calculate the price of a put option contract, The price of a non-dividend p...

The price of a non-dividend paying share, St, follows a geometric Brownian motion process. The current price of the share is £10 and volatility of the share price process is 12% pe

Describe the characteristics of money markets, Question: (a) Consider t...

Question: (a) Consider that rate of interest is 10% and you are offered either a discount bond paying you $5,000 in 5 years or a fixed-payment loan paying you $750 per year for

What interest rate is required to yield a balance, Q.  A sum of $2,500 is d...

Q.  A sum of $2,500 is deposited in a bank account that pays 5.25% interest compounded weekly. How long will it take for the deposit to double?  How long will it take you to accrue

#WALTOR''S MODEL., CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME...

CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME RATE OF RETURNS ON INVESTMENTS (R):15

Business organization, what business organization do you preffer ? service ...

what business organization do you preffer ? service concern,trading concern or manufacturing concern

Offshore pension funds, (b) What are the possible advantages of an offshore...

(b) What are the possible advantages of an offshore pension fund?

Calculate the weighted average cost, XYZ Energy Solutions plc (XYZ) has spe...

XYZ Energy Solutions plc (XYZ) has spent €12m designing and developing a new generation of domestic air source heat pumps. These new domestic heat pumps can easily be fitted to exi

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