Got a tricky question? Receive an answer from students like you! Try us!

Finance and Accounting on Cooperate Finance - Math Problem Example

High school
Author : fisherrose
Math Problem
Finance & Accounting
Pages 4 (1004 words)
Download 1

Summary

Question #1 The total cost of the trip is $10,000. However in order to have the total amount for the trip; there are two ways to accumulate the amount; contribution from the parents and gift from Aunt Hilda. The contribution of the parents would be $5,000…

Extract of sample
Finance and Accounting on Cooperate Finance

Contribution from the parents would be invested at 6% annually for a period of 3 years. However the remaining amount will be raised from Aunt Hilda’s gift. So, at the moment, the future value of the contribution from the parents would be calculated and then this future value from the parents would be deducted from $10,000 to find the future value of the amount that would be raised from the Aunt Hilda. Once this amount is identified, the present value of Aunt Hilda gift will be calculated to identify the amount required from her. Parents would contribute $5,000 and that will be invested for 3 years at 6%. Therefore the future value of $5000 after 3 years would be FV = $5000 (1+ 6%) ^ 3 FV = 5,955 As the total value after 3 years required would be $10,000. So, after three years amount required for the trip except from the contribution of the parents would be $10,000 - $5,955 = $4045 $4,045 would be the amount that would be needed after 3 years. So, this is the future value of the gift of Aunt Hilda. As this amount would be invested for three years at 10% therefore the present value of this amount would be: PV = 4,045 / (1 + 10%) ^ 3 PV = $3,039 Therefore, $3,039 would be taken from Aunt Hilda as gift. ...
Download paper

Related Essays

Accounting and Corporate Finance
It follows the principals of having discounted cash flows. The formula to find out the Net present value precisely can be written as: Cash flow (today i.e. year 0) + Cash flow (1 year from now) [/1+r (cost of capital)]^1 + Cash flow (2 years from now)/](1+r)^2 Cash flow refers to the amount of expected cash to be received at a certain point in time X years from now. Cash flows can either be negative or positive. An inflow of cash is a positive cash flow such as an income whereas an outflow is represented with a negative sign and denotes an outgoing cash amount due to for instance expenditure.…
10 pages (2510 words)
Finance and Accounting Problem
Bank interest is deducted at source at the rate of 20%. Therefore, they cannot be included as taxable income. Depreciation reflects how fixed assets of business reduce in value through wear and tear. However, depreciation is just an accounting concept with nothing to do with taxation. Depreciation can be manipulated and taxmen do not recognize it as an allowable tax. Instead, annual capital allowance is computed. Vehicle of businesses have a standard rate of 25% on a reducing balance. In April 2008, Annual Investment Allowance (AIA) of ?50,000 per annum was introduced. This allowed business…
6 pages (1506 words)
Finance accounting
Lastly, the reserves of the company is estimated and their modes of utilization so that the write-down of the company can be avoided. Impact of Australian Accounting Standards When the net realizable value for all of the subsequent period. Due to a certain circumstances the inventories of the company needs to be written down below the cost that no longer exists or with the evidence related to the net realizable value caused as a result of the changed economic circumstances (Walton & Aerts, 2006, p.120). This leads to the reversing of the write-down where the amount if restricted to original…
6 pages (1506 words)
Finance and Accounting
By June 2008, Vodafone received was awarded telecom operating license within the country, making the company as the second mobile phone service provider within the country. Vodafone started its services within Qatar on 1st March 2009. …
5 pages (1255 words)
Finance and Accounting Concepts
It consists of financial activities which include collecting, recording, analyzing and communicating the financial information to others. The financial data is a collection of facts which is expressed in numerical symbols and characters. The major task of the accountant is to records the financial transactions and converts data into financial information. The study will deal with the various accounting concepts that have helped the accountants in dissemination of financial information. Accurate financial presentation helps in the systematic recording of the financial transactions and also…
8 pages (2008 words)
Finance Problem Solving
Therefore, Amber has a net working capital of $200 and a current ratio of 1.20. This indicates that the company will be able to pay any short term obligations that arise unexpectedly due to some investment in the working capital. On the other hand, Barbie has no current assets, but has $600 worth of current liabilities. Therefore, Amber has a net working capital of negative $600 and a weak current ratio. This indicates that the company will not be able to pay any short term obligations that arise unexpectedly due to no investments in the working capital. Amber Barbie Current Assets $1,200 $0…
4 pages (1004 words)
Finance and Accounting Essay
The funny bit about such adjustments is that they can be based on the annual expenses of operating leases (Arms 2010). On the other hand, they can as well be based on the undiscounted available future operating lease payments. These are normally available on the notes to the financial statements. Such is the information that is normally available to many users of the statements and the entire statement. The information is considered insufficient hence a recommendation that the adjustments be made repeatedly and even severally while measuring the same amount. This results into uniformity and…
4 pages (1004 words)