Finance Assignment 1 
JWI 530: Financial Management I
Academic Submissions and Evaluations
Assignment 2: Management Accounting Application
Due Week 10, Day 7 (Weight: 22.5%)
In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies.
The homework answers and all this homework help was offered at and you should not submit or make it your own. We provide homework answers at http://allhomeworktutors.com/ and the work may have already be submitted for marking.
Case Analysis 1 – Weight 20% of total assignment
You work for a small, local telecommunications company. In five years, the company plans to undertake a major upgrade to its servers and other IT infrastructure. Management estimates that it will need up to $450,000 to cover all related costs; however, as a fairly young company, the goal is to pay for the upgrade with cash and not to take out loans.
Right now, you have $300,000 in a bank account established for Capital Investments. This account pays 6% interest, compounded annually.
A member of the finance department has approached you with an investment opportunity for the $300,000 that covers a five-year period and has the following projected after-tax cash flows:
Year
Projected Cash
Flow
1
$94,000
2
$114,000
3
$134,000
4
$114,000
5
$94,000
Based on this information, answer the following questions:
1) How much money will be in the bank account if you leave the $300,000 alone until you need it in five years?
Answer
Calculate the compound interest using the formula
A=P(1+R)^n
Where A= amount at end of period P= the amount you deposit today R= interest rate N= time in years
So A= 300,000(1+0.06)^5
A=$ 401,467.67
This means you will have that amount if you leave it in the account after five years.
2) If you undertake the investment opportunity, what is the Nominal Payback Period?
Payback Period is the point where the cash inflows are equal to cash outflows i.e. when
Academic Submissions and Evaluations
Assignment 2: Management Accounting Application
Due Week 10, Day 7 (Weight: 22.5%)
In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies.
The homework answers and all this homework help was offered at and you should not submit or make it your own. We provide homework answers at http://allhomeworktutors.com/ and the work may have already be submitted for marking.
Case Analysis 1 – Weight 20% of total assignment
You work for a small, local telecommunications company. In five years, the company plans to undertake a major upgrade to its servers and other IT infrastructure. Management estimates that it will need up to $450,000 to cover all related costs; however, as a fairly young company, the goal is to pay for the upgrade with cash and not to take out loans.
Right now, you have $300,000 in a bank account established for Capital Investments. This account pays 6% interest, compounded annually.
A member of the finance department has approached you with an investment opportunity for the $300,000 that covers a five-year period and has the following projected after-tax cash flows:
Year
Projected Cash
Flow
1
$94,000
2
$114,000
3
$134,000
4
$114,000
5
$94,000
Based on this information, answer the following questions:
1) How much money will be in the bank account if you leave the $300,000 alone until you need it in five years?
Answer
Calculate the compound interest using the formula
A=P(1+R)^n
Where A= amount at end of period P= the amount you deposit today R= interest rate N= time in years
So A= 300,000(1+0.06)^5
A=$ 401,467.67
This means you will have that amount if you leave it in the account after five years.
2) If you undertake the investment opportunity, what is the Nominal Payback Period?
Payback Period is the point where the cash inflows are equal to cash outflows i.e. when