What do you know about sinking funds, Financial Management

Assignment Help:

Q. What do you know about sinking funds?

sinking funds : quite often, one may be interested to accumulate a target amount over a given period inclusive of interest for the period of such a way that the annual amount being subscribed over the period over the is same for all years. In the case of a business firm, a finance manager may be interested in the accumulate a target amount in order to replace an asset or in ordered to repay at the end of the a specific .period. in this case the annual accumulation by the finance manager in fact become the annuity for a given a period where each of the annual manager in fact of the become the annuity of the for a given period where each of the annual manager of fact become the annuity for a period where each of the annual subscription will be invested for the remaining period so that the total accumulation at the end of the given period is equal to the target amount for example : an amount of Rs 100000 is required at the end of the 5 year for now to repay to debenture liability what amount should accumulated for every year at the 10% rate of interest so that it ultimate become Rs 100000 after 5 years ? This can be ascertain by finding out the value of the annuity amount.


Related Discussions:- What do you know about sinking funds

Explain the pricing spill over effect, Explain the pricing spill-over effec...

Explain the pricing spill-over effect. Suppose a firm operating in a segmented capital market (such as China, for example) decides to cross-list its stock in New York or London.

Illustrate compound value concept, Q. Illustrate Compound Value Concept? ...

Q. Illustrate Compound Value Concept? The Compound Value Concept is used to find out the FV of present money. It is the same as the concept of compound interest, wherein the in

Calculate the quality spread differential, Alpha and Beta Companies can bor...

Alpha and Beta Companies can borrow at the subsequent rates.                                                            Alpha               Beta Moody's credit rating

Zero-volatility spread, The zero-volatility spread is a measure of th...

The zero-volatility spread is a measure of the spread that the investor would realize over the entire Treasury spot rate curve if a mortgage-backed or asset-backe

Stock Valuation, You have just purchased a stock that would pay the dividen...

You have just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. You were also told that the dividends would

Approaches to financial management, mention the advantages and disadvantage...

mention the advantages and disadvantages of the traditional approach

State about the two types of government securities, State about the two typ...

State about the two types of Government Securities There are two types of Government Securities which are offered: Government Floating Rate Bonds which pay a floating rate

Calculate the cca allowance anfd the pv of tax shield , Home Inc. is consid...

Home Inc. is considering buying a new piece of equipment, which will cost $715,000 and has an economic life of 5 years, in order to produce a new line of product.  The company beli

Define the term in brief -called-up share capital, Define the term in brief...

Define the term in brief -Called-up share capital Called-up share capital that you may find in some of balance sheets. It refers to that part of subscribed capital, which share

How does the net present value relate to value of the firm, How does the ne...

How does the net present value relate to the value of the firm? The net present value is the dollar amount of the amend to the value of the firm if the project under considerat

Write Your Message!

Captcha
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!

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