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FI360 MOD 3 Discussion
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FI360 MOD 3 Discussion
The article “Why the Time Value of Money (TVM) Matters to Investors” by Brian Beers discusses the concept of the Time Value of Money (TVM). Several concepts discussed in the article relate to the core learning objectives of the course.
ULO 1 - Time Value of Money
Beers (2024) notes that a dollar today is not worth a dollar tomorrow due to the potential earning capacity. The article illustrates how vital the Time Value of Money is to a business. This principle plays a significant role in decision-making, investment analysis, and evaluating future cash flow for the business. ULO 2 – Annuities
While not explicitly discussed in the article, the principles of annuities are important in the calculation of the current and future values. An annuity involves payments made at the end of
each period. This may involve pensions, insurance, and other payments that occur at regular intervals.
ULO 3 - Interest Rates
Nominal interest rates are rates reported without taking inflation or compounding the interest into account. It is the actual interest rate agreed on and paid (European Central Bank, 2026). Periodic interest rate is the interest rate calculated for a specific period, sometimes less than a year. The effective interest rate is the real return on an investment or the real cost of borrowing. ULO 4 - Cost of Money
Factors influencing the cost of money include the risk-free rate, inflation expectations, and the risk premium required by investors. These elements determine interest rates.
ULO 5 - Market Interest Rates
According to Beers (2024), TVM is influenced by market inflation. Inflation has a significant impact on market rates. Other factors affecting market interest rates include debt or cost issues, risks, and the liquidity of securities.
ULO 6 - Yield Curve
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Related Questions
Dlhos - YouT
A Apex Learning
- Apex Learning - Courses
A https://course.apexlearning.com/public/activity/7001002/assessment
cial Literacy
1 7.1.2 Exam: Exam
Question 1 of 40
Which of these options for saving money offers the most liquidity?
A. A savings bond
B. A money market account
C. A piggy bank
D. A basic savings account
SUBMIT
E PREVIOUS
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Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation successfully. She is a fresh finance graduate and is excited to invest some money in the capital market, for which she intends to use the gifted sum of $50,000. However, instead of committing this money to the market immediately, she decides to wait for some time, work in the field and acquire some experience before proceeding with her intended investment. She thus contemplates an extremely conservative investment in a portfolio of stocks and bonds, at the start of year 5 from now. For now, she will leave the $50,000 in a fixed deposit with the bank which promises an interest rate of 6% per annum. She will require a return of at least 9% on her stock investments and 4% on bond investments. Stephanie would have to pay 25% taxes on any interest income. Dividends will be tax-free. Stephanie's research has allowed her to narrow down on the…
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SOUTH EAST-ASIA INSTITUTE OF TRADE AND TECHNOL0GY
LL
LEARNING MODULE FOR 1
SEMESTER
GRADE 12
BUSINESS FINANCE
STUDENT'S NAME:
STRAND & SECTION:
PART 4: ACTIVITY/APPLICATION
Suppose: The following income Statements and Cash Flow Statements of company A, B and C were presented to you.
Which do you think is a more attractive company? Why?
O STAED
rasoplast
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Can I know how to solve this?
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Please answer question 1 after reading the scenario thank you question at the end
Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation successfully. She is a fresh finance graduate and is excited to invest some money in the capital market, for which she intends to use the gifted sum of $50,000. However, instead of committing this money to the market immediately, she decides to wait for some time, work in the field and acquire some experience before proceeding with her intended investment. She thus contemplates an extremely conservative investment in a portfolio of stocks and bonds, at the start of year 5 from now. For now, she will leave the $50,000 in a fixed deposit with the bank which promises an interest rate of 6% per annum.
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Abm (business math questions) can you help me?
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Homework Question 19: At Present, You Should Not Discount the Value of Learning
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a) You receive a $5,000 bonus at work. Your bank is offering a 5-year Certificate of Deposit with
an interest rate of 5.25%. How much will you have in your savings account after 5 years?
b) My mother-in-law offers to make a $5,000 contribution when my son starts college in five
years. She has access to the same bank account you have, and wants to know how much
money she should put into the account today to ensure that she will have the promised funds.
How much should she put in?
c) You're thinking about installing solar panels on your roof. They will cost $15,000 to install,
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15. a. Why learning Time value of Money concepts is important?b. If we deposit Rs. 1,000 today calculate the time taken for the deposit to double if the interest rate is 10% , compounded annually , using a. Future value method b. Rule 72 c. Rule 69
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Please answer question 10 in derail showing computation after reading the scenario thank you. Question at the endStephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation successfully. She is a fresh finance graduate and is excited to invest some money in the capital market, for which she intends to use the gifted sum of $50,000. However, instead of committing this money to the market immediately, she decides to wait for some time, work in the field and acquire some experience before proceeding with her intended investment. She thus contemplates an extremely conservative investment in a portfolio of stocks and bonds, at the start of year 5 from now. For now, she will leave the $50,000 in a fixed deposit with the bank which promises an interest rate of 6% per annum. She will require a return of at least 9% on her stock investments and 4% on bond investments. Stephanie would have to pay 25% taxes on any interest income. Dividends will be tax-free.…
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Year
0
1
3
4
5
6
-Assuming an interest rate of 5%, which three cash flows have the best
Net Present Value? (Remember to show your work!):
Estimated Response Time for Average Student: 2 minutes)
a. Cash Flows C, D, and F
b. Cash Flows A, E, and D
c. Cash Flows D, E, and F
d. Cash Flows D, F, and G
e. Cash Flows D, E, and G
-Assuming an interest rate of 5%, which three cash flows have the best
Equivalent Uniform Annual Worth (EU AW)? (Remember to show your work!):
(Estimased Response Time for Average Student: 2 minutes)
a. Cash Flows A, D, and G
b. Cash Flows C, D, and E
c. Cash Flows B, C, and F
d. Cash Flows E, F, and G
e. Cash Flows C, E, and F
B
A
($75,000) $75,000)
$15,000
$0
$15,000
$0
$15,000
$15,000
$15,000
C
($75,000)
D
$75,000)
$0
$50,000
$0
$25,000
$27,000
$10,000
$15,000 $54,000 $5,000 $105,000
$0
$0
E
($75,000)
$5,000
$5,000
$5,000
$5,000
$72,500
$2,500
I
F
00)
$37,750
$5,000
$0
$0
$5,000
$37,750
G
($75,000)
$0
$52,750
$27,750
$0
$0
$10,000
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Book name: Fundamental financial management 12th Edition
Author: Joel F Houston,Eugene F Brigham
Chapter: 5 . (problem 5-19)
Chapter: 8 . (Problem 8-10)
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S26-9 Determining present value
Learning Objective 3
Use the Present Value of $1 table (Appendix A, Table A-1) to determine the
present value of $1 received one year from now. Assume a 8% interest rate. Use
the same table to find the present value of $1 received two years from now.
Continue this process for a total of five years. Round to three decimal places.
Requirements
1. What is the total present value of the cash flows received over the five-
year period?
2. Could you characterize this stream of cash flows as an annuity? Why or
why not?
3. Use the Present Value of Ordinary Annuity of $1 table (Appendix A, Table
A-2) to determine the present value of the same stream of cash flows.
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Instruction: Use the table below to acquire information and answer the following questions. Please do not use signs like Rs., $, % etc in your answer. If you calculate percentage as 10.23% than answer must write like 10.23 only (do not write like 10.23% or 0.1023)
Year
0
1
2
3
4
Cash flows
−$950
$525
$485
$445
$405
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Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation successfully. She is a fresh finance graduate and is excited to invest some money in the capital market, for which she intends to use the gifted sum of $50,000. However, instead of committing this money to the market immediately, she decides to wait for some time, work in the field and acquire some experience before proceeding with her intended investment. She thus contemplates an extremely conservative investment in a portfolio of stocks and bonds, at the start of year 5 from now. For now, she will leave the $50,000 in a fixed deposit with the bank which promises an interest rate of 6% per annum.
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My Blackboard
MTH101 B01 - QUANTITATIVE LITERACY (Fall 2021 Credit Courses)
Homework
Homework 1.3
Homework 1.3
Score: 0/19
2/8 answered
X Question 3
>
Score on last try: 0 of 1 pts. See Details for more.
> Next question
2 Get a similar question You can retry this question below
You deposit $6000 in an account earning 5% interest compóunded monthly. How much will you have in the
account in 15 years?
$ 8,540.57
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Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation successfully. She is a fresh finance graduate and is excited to invest some money in the capital market, for which she intends to use the gifted sum of $50,000. However, instead of committing this money to the market immediately, she decides to wait for some time, work in the field and acquire some experience before proceeding with her intended investment. She thus contemplates an extremely conservative investment in a portfolio of stocks and bonds, at the start of year 5 from now. For now, she will leave the $50,000 in a fixed deposit with the bank which promises an interest rate of 6% per annum.
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please solve it as hand writing don't use exel or another program
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