Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Project Management Expert

Objective: This task will give you some experience using common time value of money related finance methods.
 
Specific Requirements for this Assignment:
 
1) You should use Microsoft Excel software for this assignment.

2) Submit a Microsoft Excel workbook titled SEB324 A3 Part 4.xlsx (or .xls)

3) Provide the computations and answers for all problems with one sheet in the workbook used for each problem. So that means your single submitted workbook file should consist of two spreadsheets. Label each spreadsheet in your workbook file respectively as problem 1 and problem 2.

4) Provide all answers to two decimal places and/or the nearest cent.

problem 1: You receive an offer in the mail from the Norman Harvey Bank inviting you to apply for a new personal loan. The offer invites you to access immediately up to $20,000 on this special personal loan with the principal amount to be repaid in full plus all accumulated interest in 24 months’ time. (There are no interim repayments to be made between now and when the total amount is due in 24 months’ time.) Interest will be computed on a monthly compounding basis at 0.72% per month. 
 
Also in the mail you have received an offer from the West Bank inviting you to apply for a new term deposit account which pays a nominal interest rate of 8.65% p.a. computed monthly on a compounding basis. The minimum initial deposited amount required is $20,000 and any deposits must be left in the account for a minimum of 24 months. 
 
You are considering applying for the personal loan from the Norman Harvey Bank in order to immediately invest the entire $20,000 into the West Bank term deposit account being offered. Does this investment opportunity offer a worthwhile positive return on investment from combining these two offers? Would you recommend this opportunity? Justify your answer.

problem 2: You have been asked to evaluate the financial viability of three investment options for your company. You are asked to use the Simple Payback, IRR, and NPV methods to evaluate the options and make a recommendation on which of them, if any, to proceed with. The selection of any option is mutually exclusive. Perform simple payback, IRR, and NPV analyses on the investment options.
 
The expected nominal cashflows for Years 1 through 5 produced by each investment option are provided in the table below. The initial amount required for all three-investment options is $15,000. For the NPV analysis assume a cost of capital of 10% p.a. For the IRR analyses assume the minimum rate of return required for any option to be considered viable is 15% p.a.

1324_nominal cash flows.jpg

Which investment option, if any, would you recommend and why? Justify your answer.

Project Management, Management Studies

  • Category:- Project Management
  • Reference No.:- M9348

Have any Question? 


Related Questions in Project Management

Project management for business assignment -enabling a

Project Management for Business Assignment - Enabling a Customer-Centric Experience through Project Management (Case Study Adapted from Project Management Institutes) Organization: Du Telecom and Huawei Technologies Co. ...

Reflect on kotters 2007 steps for establishing a strategic

Reflect on Kotter's (2007) steps for establishing a strategic vision and buy-in for change. Describe how that framework can be applied to your strategic initiatives withinproject. Provide thoughts on how this could impro ...

You are recently assigned to manage an effort to upgrade

You are recently assigned to manage an effort to upgrade about 200 desktops in your company to Windows 10. The project has 4 team members reporting directly to you and is estimated to last about 3 months. Per your compan ...

What are the types of documents required to define

What are the types of documents required to define parameters in a project?

Case study and research project clairicationfinding a case

Case Study and Research Project Clairication Finding a case for the research project does not mean that you are limited to the company identified in the case. Rather it is to identify an issue identified in the case that ...

Project management assessment - research studypurpose of

Project Management Assessment - Research Study Purpose of the assessment - Develop skills in Project communication planning. Communication is Key to Successful Project Management. The cases illustrate different approache ...

Part -1 define project and develop planperformance

Part -1 Define project and develop plan Performance objective Candidates will demonstrate knowledge and skills required to define projects and develop project plans. Assessment description Using the workplace scenario in ...

Wahat are the similarities and differences between the

Wahat are the similarities and differences between the PMBOK and PRINCE2 approaches to project Stackholder management.

What are the advantages and disadvantages of cost of poor

What are the advantages and disadvantages of Cost of Poor Quality (COPQ)?

Discuss the different approaches to developing either a

Discuss the different approaches to developing either a Product Breakdown Structure (PBS) OR a Work Breakdown Structure (WBS).

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As