BUS5IAF Introduction to Accounting and Finance

Published : 06-Sep,2021 | Views : 10

Question:

Write a short essay of 300 words for each of the following questions.For each question, illustrate your answer with an appropriate example.Describe the maximisation of shareholder wealth concept and contrast it with the notion of maximisation of profit Risk aversion implies that only risk-free investments will be undertaken by corporate manager . Critically evaluate this statement.

Answer:

Particulars	Amount
Total Fund Desired	$10,000
Periodic Payments	$800
Interest Rate p.a.	10%
Nos. of Payments p.a.	2
Compound Interest	5.00%
Total nos. of Payments	9.95
Nos. of Full Payments	9
Size of Concluding Payment	$760
Total Value of Lottery	$2,00,000
Initial Withdraw	$20,000
Investment Value	$1,80,000
Rate of Interest p.a.	10%
Deferred Period (in years)	4
Future Investment Value after 4 years	$2,63,538
Monthly Rate of Interest	0.83%
Nos. of Monthly Payments	180
Size of Equal Payments	$2,832
Annual Deposit	$4,000
Interest Rate p.a.	5%
Nos. of Deposits	11
Total Deposit Amount in 2017	$59,669
Annual Payment	$20,000
Interest Rate p.a.	6%
Nos. of Deposits	10
Present Value of the Total Payments	$1,56,034
Current Sale Price of Future Rights	$1,50,000
Loss on Sales	($6,034)
Period	Annual Annuity
1	$1,000
2	$1,100
3	$1,210
4	$1,331
5	$1,464
6	$1,611
7	$1,772
8	$1,949
9	$2,144
10	$2,358