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
Q. Importance of the cost of capital? 1. Evaluating financial performance: the actual profitability of the project is compared to the projected overall cost of capital and th

given just the sales and profit values, how is the break-even sales calculated?

The Central Bank is an authority responsible for monetary policy of its country. It regulates money supply and credit, issues currency, and manages exchange rate.

Managing Risk and Contingency Plan: An essential component of any financial management framework is the validation and protection of the information contained in the system. In

Eatmore & Green Pty. Ltd (Australia) is a successful medium sized marketing consultancy for Australian agricultural products and Australian sourced organic, natural beauty/cosmetic

A. Mitt starts Examine Your Zipper Incorporated ("XYZ") in 2012 by selling common stock of $12,000,000. He promises the investors in his company a 15% return on their capital. B

In multiple correlation equations we are often interested in finding out how much of the variation in the dependent variable is explained by one independent variable if all the oth

What is the Modigliani and Miller theory of dividends?  Explain. The Modigliani-Miller theory of dividends says so as dividend theory is irrelevant.  They claim so as to it is

What does an investment banker do when underwriting a new security issue for a corporation? While underwriting a new security issue an investment banker buys it and after that re

We have seen computation of present value using single discount rate. But the right way to value a cash flow of a bond is to use multiple discount rates, i.e valuing th