Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) After graduating from graduate school you create it big—all because of your success in financial management. You make a decision to award a scholarship for needy finance students that will give $3,000 per year indefinitely, beginning one year from now. How much should be deposited today to fund scholarship fund under given conditions?

a) The interest rate is 10% compounded annually.

b) The interest rate is 8% compounded annually.

c) For both 10 and 8%, if everything remains same except that first disbursement will not be made until three years from now.

2) Winery requires $500,000 for expansion of its warehouse. Company plans to finance $100,000 with internally generated funds but desires to secure the loan for remainder. The contracting firm’s finance subsidiary has presented to give the loan based on 6 annual payments of $97,300 each. Alternatively, San Jose Winery’s bankers will lend firm= $400,000, to be repaid in annual instalments (covering both principal and interest), at the 15 percent interest rate. Ultimately, the insurance firm would also loan money; it needs a lump sum payment of $750,000 at end of 6 years.

a) Based on respective annual percentage cost of 3 loans (you should present each effective interest rate), which one must San Jose choose? In case of 2nd loan by firm’s bankers, what would be dollar value of annual payment?

b) What other considerations might be significant in addition to cost?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915193

Have any Question? 


Related Questions in Basic Finance

Assignmentlife situationfinancial datasinglemonthly

Assignment Life Situation Financial Data Single Monthly income $2,600 Age 22 Living expenses $2,180 Starting a career Assets $8,200 No dependents Liabilities $3,470 Emergency fund $530 Since the major portion of Pam's in ...

An analysis of water testing to determine lead content was

An analysis of water testing to determine lead content was conducted in the metropolitan area. Specifically samples were taken at 100 homes in the area of Guaynabo and another 100 samples were taken in the area of Hato R ...

Impact of the economy explain how the expected interest

Impact of the Economy : Explain how the expected interest rate in one year depends on your expectation of economic growth and inflation.

Module slp cash flowthis assignment requires word and excel

Module SLP CASH FLOW This assignment requires word and excel documents. Cash Flow Estimation and Capital Budgeting Applying Various Capital Budgeting Methodologies The objective of a firm is to maximize shareholder wealt ...

Consider a put option with an exercise price of 40 on a

Consider a Put OPTION with an exercise price of $40 on a stock trading at $50 per share. For FULL credit, answer BOTH PARTS: 1 What is the Intrinsic Value of the PUT option described (this is a dollar value, not a descri ...

What is moral hazard why does deposit insurance inherently

What is moral hazard? Why does deposit insurance inherently involve moral hazard? What factors contribute to moral hazard on the internatinal level?

Discuss why financial markets are important to a healthy

Discuss why financial markets are important to a healthy economy and how they contribute to economic growth. Question two: assume that you recently graduated with a degree in finance and have just reported to work as an ...

Why is it important to understand whether the data is

Why is it important to understand whether the data is discrete or continuous? Why is it "important to understand which type of data you are dealing with in each situation"? Is continuous data considered "categorical" dat ...

I need your help with the below three assignment no need

I need your help with the below three assignment. No need for "Executive Summary" just start with introduction, please. Assignment 1: Module 01 - Introduction and Framework for Sustainability Which of the nine principles ...

Surplus and deficit units explain the meaning of surplus

Surplus and Deficit Units Explain the meaning of surplus units and deficit units. Provide an example of each. Which types of financial institutions do you deal with? Explain whether you are acting as a surplus unit or a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate