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




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
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
Describe the controller's role in designing internal control systems. Identify examples of different internal controls a controller can consider in designing an effective inte
A) Computer stocks currently provide an expected rate of return of 14%. MBI, a large computer company, will pay a year-end dividend of $1 per share. If the stock is selling at
A basketball player is offered the following contract today, Jan. 1, 2012: $2 million immediately, $2.40 million in 2012, $2.90 million in 2013, $3.60 million in 2014, and $3.
Aqua System Inc. expects to have $23,646,500 in credit sales during the coming year. Currently all checks are sent to the home office. A proposed lockbox system can eliminate
The management of Stanforth Corporation is investigating automating a process. Old equipment, with a current salvage value of $30,000, would be replaced by a new machine. The
An investment of $83 generates after-tax cash flows of $44.00 in Year 1, $72.00 in Year 2, and $127.00 in Year 3. The required rate of return is 20 percent. The net present va
A proposed project has fixed costs of $96,000 per year. The operating cash flow at 6,600 units is $96,200. Ignoring the effect of taxes, what is the degree of operating levera
The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.4 million and net plant and equipment equals