Assignment Task
Question 1
1. You have just won a prize with the following options to choose from.
Option 1: Receive $100,000 today
Option 2: Receive $10,500 per annum for 10 years, starting with the first payment today.
Option 3: Receive $50,000 today and $80,000 at the end of 10 years.
Option 4: Receive $4,500 per annum forever.
If interest rate is 5% p.a., which option should you choose?
2. You are asked to evaluate two investment projects that generate the following cash flows:
|
Year |
Project A |
Project B |
|
1 |
$5,000 |
$1,000 |
|
2 |
$4,000 |
$2,000 |
|
3 |
$3,000 |
$3,000 |
|
4 |
$2,000 |
$4,000 |
|
5 |
$1,000 |
$6,000 |
If your required rate of return is 7%, which project should you choose?
3. You are comparing two credit cards that charge interests differently. Credit Card A charges 15% per annum and calculates its interest daily. Credit Card B charges 16% per annum and calculates its interest monthly. Which credit card should you choose?
Question 2
1. You just purchased a $1,000 par value, 5-year, 8% annual coupon bond that pays interest on a semi-annual basis. The bond sells for $950. What is the bond’s yield to maturity?
2. Burwood Ltd has not paid any cash dividends before but plans to pay at $1.50 per share starting two years from today. The growth rate in dividends is expected to be 3% per annum indefinitely. Assume that the required rate of return on Burwood’s shares is 10% per annum. What should be its share price today?
This Accounting And Finance Assignment has been solved by our Accounting And Finance experts at Online Assignment Bank. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.
Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.
