User Account

All Pages

Find the future value of the payment

Assignment Help Finance Basics
Reference no: EM132680043

Assume that the opportunity cost of capital is 15%. Alfred Banda, a legal practitioner, has just won lottery amounting to K2,000,000. There has been an agreement between the Lottery Company and Alfred regarding the way payments will be made. The two parties have agreed to an equal annual instalments of K500,000. The lottery is not paying him immediately. The first payment will be made at the end of the sixth year.

i. Find the future value of the payment.

ii. Suppose that the alternative to receiving the money in instalments is to receive immediate cash amounting to K1,500,000. Which option would you advise Alfred to accept? Explain.

Reference no: EM132680043

Questions Cloud

Cooperation or conflict between congress and the presidency : Explain why and how the process increased cooperation or conflict between Congress and the Presidency.
What is the year adjusted gross income : Kabuo and Melinda, If Kabuo and Melinda choose to file jointly, what is their year adjusted gross income, taxable income, and tax liability?
What is the expected net present value : Based on the above information, what is the expected net present value of this Z90 project if the cost of capital is 12%?
What is the importance of assessing laboratory values : What is the importance of assessing laboratory values when prescribing medications? How might the laboratory values, in this case, impact your treatment plan?
Find the future value of the payment : Assume that the opportunity cost of capital is 15%. Alfred Banda, a legal practitioner, has just won lottery amounting to K2,000,000. There has been an agreemen
What requirements will make on the use of the funds : What requirements will you make on the use of the funds? Will you allow the citizens of this community to use this money right away to solve immediate needs
Prepare an income statement : The following account balances were taken from the adjusted trial balance for On-Time Messenger Service, Prepare an income statement
Appropriate for governments within the same category : Why is it difficult to develop accounting principles that are appropriate for governments within the same category
Which statements regarding inventory accounting is false : Which statements regarding inventory accounting is false? Inventory carrying cost should include transportation costs that are paid by the purchaser.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd