Financial equivalent of the balance, Financial Management

The Federal Minister for the Environment is worried about the Greenhouse Effect, one outcome of which would be that Adelaide would have a subtropical climate by the year 2015. This would mean that Adelaide would be suited to growing bananas using a new cloned variety that can produce normal yields at the end of the second year of planting.

Equally the Federal Treasurer is worried about balancing the 2011 financial year budget. The two ministers have thus "cooked up" a plan to sell Edinburgh airfield (valued at $200 million) to a Queensland banana growing consortium. After intense negotiations the consortium has agreed to a down-payment (due at the beginning of 2011) of $50 million with the financial equivalent of the balance to be paid in equal annual instalments over 10 years with the first of these instalments due at the end of 2020.

The varieties of bananas that are currently grown are expected in 2020 to have a wholesale price of $40 for a box weighing about 20 kilograms. If the Edinburgh land is expected to produce 1,250,000 boxes of new variety bananas per annum, by how much would the consortium need to increase the wholesale price per kilogram of its bananas in order to pay the debt to the government if interest is j2 = 10% p.a.?

 

Posted Date: 2/22/2013 5:08:42 AM | Location : United States







Related Discussions:- Financial equivalent of the balance, Assignment Help, Ask Question on Financial equivalent of the balance, Get Answer, Expert's Help, Financial equivalent of the balance Discussions

Write discussion on Financial equivalent of the balance
Your posts are moderated
Related Questions
Calculate Debt or Equity Ratio XYZ LIMITED Key data related to XYZ for last three years is as follows:   2011/12 2010/12

The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some academic th

Explain the organization and function of commodities exchange

Put This is an agreement which is allowing a holder of privacies to sell them back to the issuer at a specified amount during a specified time interval. This technique protects

#quA stock has a current dividend of $0.32 with a growth rate of 8% annually. Assuming a 10% annual discount rate, what should the price of the stock be one year from today? Answer

A/A2 is generally the second- or third-highest rating that a rating agency gives to a security or carrier. This rating indicates that there is a comparatively low risk of default a

What factors are responsible for the recent surge in international portfolio investment (IPI)? Answer:  The recent surge in international portfolio investments denotes the global

If the issuer company is taken over, then the bondholders are likely to suffer. It is due to lowering of the stock prices in the market as a post takeover effect.

Determine about the risk management systems Management must report to board their review and implementation of internal controls and risk management systems. The board must rev

Types of Financial Assets Majority of financial assets used worldwide are in the form of deposits, stocks and debt. Deposits Deposits can be made either with banking or