## Extract of sample

However, owing to the notion of time value of money, the buyer would be required to save an amount different from that of $25,000. Taking the 5 year interest rate of 0.78% (U.S Department of The Treasury, 2012), the saving required annually amounts to the future value of an annuity (ordinary) assuming that $125,000 will be required after 5 years. This amounts to: 125,000= C* {(1.0078^5)-1/0.0078} = $24,613.03 Where: C= unknown i= 0.78% n=5 This is based on the following formula: FV (annuity) = C * {[(1+i) ^n – 1] / i} (Brigham & Houston, 2011) Where: C = Cash flow per period i = interest rate n = number of payments Two factors highly influence the future value of the cash flows calculated today; firstly, the periods for which they are calculated and, secondly, the rates at which they are calculated (Brigham & Houston, 2011). In both cases, the future value of the savings today is directly related to the interest rate and period. Higher the interest rate or period at which cash flows are calculated, greater the amount of future value of the investments made at T=0 (Brigham & Houston, 2011). Furthermore, the fact that whether savings are made at the beginning or end of a particular period, as well as the number of compounding periods also matters (Brigham & Houston, 2011). ...

Download paper
### Related papers

INDIVIDUAL COURSEWORK
‘Blaak’ brands are much accommodative since they can go hand in hand with most colours and blaak simply was for the transformative quality of the colour. BLAAK has spread its geographical brand to Asia, US, Oceanic with new markets emerging in Africa. BLAAK philosophy remains but the visions has widened and now include other creation with colours other than black, and with the combination of…

maths coursework
The Laplace transforms formula is given below: L[f(t)]= here f(t) is piecewise continuous and the derivative of f(t) should exist in the domain of t (t?0) Q2. L[]==, s>k. Q3. The following are the Laplace transforms for the given S.No. Function y(t) Laplace Transform L{y(t)} Region of Convergence (ROC) 1 y(t) Y(s) n/a 2 a (=a constant) a/s Re(s)>0 3 t 1/s2 Re(s)>0 4 t2 2/s3 Re(s)>0 5…

Analytical Application Coursework
Country Annual inflation rate Spot rate USA 3% N/A UK 4.2% 1.62 Substituting the values in the purchasing power parity formula Forward rate = ( 1 + 0.042 ) x 1.62 1 + 0.030 Forward rate = 1.639 Answer 2 The appreciation / (Depreciation) in the British pound using the interest rate parity theory is as follows Country Spot rate One year forward rate Appreciation / (Depreciation) Percentage UK 1.62…

Financial Information: Coursework Assignment
The company has also recently initiated its telecom and data manager and distributions business lines (Bloomberg 2012). The company sells its products and services through its physical stores and also online ecommerce solutions to its millions of customers worldwide. The company operates for achieving its visions that is “to create value for customers to earn their lifetime loyalty” (Tesco…

Final Coursework
In order to determine the feasibility of a project and to allow for comparisons between those that are mutually exclusive several very useful and highly recognised techniques are available. They include: I. Net present value (NPV) II. Internal rate of return (IRR) III. Accounting Rate of Return (ARR); and IV. Simple payback There are three (3) machines that the firm is considering as an…

Financial Accounting coursework
References……………………………………………………………………………….7 1. Executive Summary This report includes some of the basic principles and conventions that must be adhered to while preparing the financial statements. It includes analysis and evaluation of some of the accounting practices and conventions. This report also analyses and evaluates some of the…

PMM Coursework
(d) If John would have produced dressings in house, the net loss would have been less as compared to outsourcing. He would have incurred a net loss of ?25,600 rather than ?30,000 leading to an eventual profit of ?74,000 (the working for this is shown in table 2 below). In house production would have not damaged the costs like it did with outsourcing and the prime reason for this could be the…