Time Value of Money, Financial Management

Assignment Help:
Two years ago, Randburg Ltd needed to accumulate a total of R250000 by the end
of 5 years to acquire new imported machinery. To do so Randburg Ltd makes
quarterly-annual deposits into a fund which earns 16% interest per annum
compounded quarterly. To date, the company has made eight equal quarterly
deposits into the fund. The cost of the machinery has just gone up to a total of R450
000 in three years’ time. However, Randburg Ltd can now earn 20% per annum
interest compounded semi-annually. All monies accumulated to date will from now
on earn a return of 20% per annum, interest compounded semi-annually. What is the
increased semi-annual deposit that Randburg Ltd will need to make instead of
quarterly payments, so that the fund will contain R450 000 in three years’ time?

Related Discussions:- Time Value of Money

Volatility risk, Expected volatility is a major factor that affects t...

Expected volatility is a major factor that affects the value of an option. Expected volatility of an option on bond is referred to as 'expected yield volatility'. The

Modern approach at financial problems, Modern approach at financial problem...

Modern approach at financial problems With the advent of technology and need to tighten shipsdue to competition, financial management became as much a science as art. Efficient

Define finance function and discuss its nature, Q. Define Finance Function ...

Q. Define Finance Function and discuss its nature and scope Ans. Meaning of Finance: - Finance is defined as the provision of funds at the time when it is required. The role of

Empirical measurement of liquidity, Empirical Measurement of Liquidity: Th...

Empirical Measurement of Liquidity: The number of days a particular share is being traded reflects the liquidity of the market. If it is traded actively on 50% of the days when th

Define futures positions closed out through reversing trade, Why are most f...

Why are most futures positions closed out through a reversing trade rather than held to delivery? Answer:  In forward markets, almost 90% of all contracts that are basically es

What is the time value of money, What is the time value of money? The t...

What is the time value of money? The time value of money signifies that money you hold in your hand today is worth more than money you expect to receive in the future. Likewise

Market, On January 1 a bond with face value of $1,000 is for sale in the ma...

On January 1 a bond with face value of $1,000 is for sale in the market.  That bond has a coupon rate of 6%, pays interest only once a year and the end of the year, and matures at

Explain calculation firm risk of a capital budgeting project, Explain how t...

Explain how to measure the firm risk of a capital budgeting project. The firm risk of a capital budgeting project calculates the impact of adding a new project to the existing pr

Role of special purpose vehicle, The financial institutions tha...

The financial institutions that originate the loans sell a pool of cashflow-producing assets to a specially created third party that is called a

What is nondiversifiable risk? how is it measured, What is nondiversifiable...

What is nondiversifiable risk? How is it measured? But for the returns of one-half the assets in a portfolio are flawlessly negatively correlated with the other half-which is e

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