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
It is an accounting term which refers to the balance sheet item that accounts for dividends that have been confirmed but not yet given to shareholders. Accrued dividends are taken

Operating Leverage Operating leverage define the degree to which an organization cost of operation is fixed as opposed to variable. Therefore, it is a measure of how much a fir

Turnover has increased 10% since 2009 even if this is at the expense of a drop in the gross margin earned which has fallen from 35.0% to 32.7% which has resulted in only a marginal

What is Estimation of Current Assets? Please provide me report on Estimation of Current Assets. It is about 2000 words count report on topic Estimation of Current Assets.

Unlike the mortgage pass-through securities, the mortgage-backed bonds are debt obligations of the mortgage originator. Every issue of such bonds should be backed

It is a bond that does not give periodic interest payments. In spite of that, interest is added to the principal balance of the bond and is either paid at maturity or, at some poin

The amount by which the market price exceeds the conversion value or the investment value is called as the premium.

Suppose you are a euro-based investor who simply sold Microsoft shares which you had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120 each shar

Q. Determine Earnings per share? Current earnings per share = 100 × (4550 - 225)/ 5000 = 86.5 cents Earnings per share after one year = 100 × (4508 - 225)/ 5000 = 85.7 cents

Effect on Exchange Rates As we know, one of the most vital determinants of changes in relative exchange rates is the relative inflation rate. Assuming a free and open market, i