+1-415-670-9189
info@expertsmind.com
Personal financial management
Course:- Financial Management
Reference No.:- EM13238




Assignment Help
Assignment Help >> Financial Management

You have recently won the UniSA "log tossing" competition. The prize of $200 is supposed to be used to buy a 50-year subscription to "Log News" This appears to represent a considerable saving on the normal subscription of $4.25 per half year, payable at the beginning of each half year with the first subscription due now. However, as a financial management student you figure that you may be better off by investing the prize money in your savings account which pays interest at an annual effective rate of 8% p.a. and paying the half yearly subscriptions from that account.

(a) How much (if anything) will you have left over each half year if you adopt the latter course of action?

(Note: If you received from your account an equal amount every half year starting at the beginning of the first half-year, from which you paid the normal subscription, how much would you have left over each half year?)

(b) Assuming you adopt the latter course of action, could you afford to pay to attend the World Log Tossing Convention when you retire in 40 years from now when the registration is expected to cost $1,850 at that time? 




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Dilwater Furniture purchased a corner lot in Pittsburg five years ago at a cost of $890,000. The lot was recently appraised at $1,070,000. At the time of the purchase, the com
What is the net present value's assumption about how cash flows are re-invested? a. they are reinvested at the IRR b. They are reinvested only at the end of the project c. The
The Oviedo Thespians are planning to present performances of their Florida Revue on 2 consecutive nights in January. It will cost them $5,000 per night for theater rental, eve
International Foods Corporation, a U.S.-based food company, is considering expanding its soup-processing operations in Switzerland.- Calculate the net present value of the pr
Preferred stock offers the issuing corporation and investors advantages and disadvantages. Which of the following statements describes a disadvantage for the issuer of preferr
Caan Corporation will pay a $2.94 per share dividend next year. The company pledges to increase its dividend by 4.5 percent per year indefinitely. If you require a return of 1
Determine the yearly after-tax cash outflows for each firm, assuming that lease payments are made at the beginning of each year and that the firm is in the 40 percent tax br
If a company's dividends are expected to decline, is it possible to still use the constant growth dividend discount model? What is the relation between the expected return o