Time Value of Money, Financial Management

Two years ago, Randburg Ltd needed to accumulate a total of R250000 by the end
of 5 years to acquire new imported machinery. To do so Randburg Ltd makes
quarterly-annual deposits into a fund which earns 16% interest per annum
compounded quarterly. To date, the company has made eight equal quarterly
deposits into the fund. The cost of the machinery has just gone up to a total of R450
000 in three years’ time. However, Randburg Ltd can now earn 20% per annum
interest compounded semi-annually. All monies accumulated to date will from now
on earn a return of 20% per annum, interest compounded semi-annually. What is the
increased semi-annual deposit that Randburg Ltd will need to make instead of
quarterly payments, so that the fund will contain R450 000 in three years’ time?
Posted Date: 4/8/2013 10:29:23 AM | Location :







Related Discussions:- Time Value of Money, Assignment Help, Ask Question on Time Value of Money, Get Answer, Expert's Help, Time Value of Money Discussions

Write discussion on Time Value of Money
Your posts are moderated
Related Questions
FACTORS INFLUENCING CAPITAL STRUCTURE/DETERMINANTS OF THE CAPITAL STRUCTURE 1. Financial leverage (or) Trading on equity it is the make use of long term fixed interest bea

Revenue bonds are the securities issued for financing an entity for general      public-purpose. The securities issued for entity financing are backed up with the

In all previous illustrations, we assumed that coupon payments are paid on annual basis. However, most of the bonds carry interest payment semi-annually. Semi-ann

The Option-Adjusted Spread (OAS) is a measure of the yield spread (expressed in basis points) which can be used to convert differences between the values an

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

CORPORATE GOVERNANCE Corporate governance can be stated in different ways, for example: The Private Sector Corporate Governance Trust (PSCGT) defines that corporate governan

How does the market determine the fair value of a bond? The bond’s fair value is the present value of the bond's coupon interest payments plus the present value of the face value

Describe the major financial problems of a firm The three questions posed above cover between them the major financial problems of a firm. Or we can say that financial manageme

Stable Money Measurement A business entity enters within numerous transactions in which affect the business in varied ways.  Therefore recording, classification and summarizat

Assemble all other inputs/assumptions based on the past data. Use your best judgment to have the most reasonable estimates. Tasks 1. Prepare an Excel spreadsheet containi