Assignment FIN301 - Principles of Finance Dr. Alan Harper March 5‚ 2011 Part I: A. Suppose your bank account will be worth $15‚000.00 in one year. The interest rate (discount rate) that the bank pays is 7%. What is the present value of your bank account today? What would the present value of the account be if the discount rate is only 4%? Present Value at 7% $15‚000/1.07=$14‚018.69 Present Value at 4% $15‚000/1.07=$14‚423.08 B. Suppose you have two bank accounts‚ one called Account
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Discount atv tires Discount Tire was founded in 1960‚ in Ann Arbor by Bruce T. Halle. It has grown from one operation to the tire and wheel retailer largest independent US. Its growth was mainly due to the company’s focus on affordable‚ customer service‚ and ensure their satisfaction. Halle said that for a company to have the outstanding features in the commodities market‚ product differentiation. However‚ improving the customer experience is an urgent job to be able to enhance the value of the brand
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was very aggressive when it came to negotiating discounts. Opposed to regular coupons that might vary in the percentage of discounts given‚ Groupon only gave out vouchers with a radical discount of at least 50%. Being able to find such high discounts on a regular basis for many different products and services all in one place‚ made Groupon very attractive to consumers. It was very convenient that the offers were local but not limited to a certain store or product/service. And the offer was also very
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effect by thoroughly understanding its underlying causes. Procter & Gamble (P&G) introduce this term. Logistics executives at Procter & Gamble (P&G) examined the order patterns for one of their best-selling products‚ Pampers. Its sales at retail stores were fluctuating‚ but the variabilities were certainly not excessive. However‚ as they examined the distributors’ orders‚ the executives were surprised by the degree of variability. When they looked at P&G’s orders of materials to their suppliers
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present value analysis: Step 1. Select the discount rate. Step 2. Identify the costs/benefits to be considered in analysis. Step 3. Establish the timing of the costs/benefits. Step 4. Calculate net present value of each alternative. Step 5. Select the offer with the best net present value. This section will demonstrate the use of that 5-step process in two lease-purchase decision examples using nominal discount rates. You should follow the same steps for any
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Widgets Airlines‚ Inc. should offer a discount on the remaining seats. What are the advantages and disadvantages of not offering a discount on seats 11 through 18? The advantages of selling at a discounted price are that they would sell their seats faster depending on the price they are selling at. This could be a beneficial by gaining more customers who travel for business on a weekly basis especially on Thursdays. The disadvantage of not offering discounts is that the flight will have empty seats
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Valley Furniture‚ and Jim Woo has been assigned as your supervisor. At an initial meeting with Jim Woo‚ he explains that Pine Valley Furniture is currently involved with two important systems development projects‚ the Customer Tracking System and Web Store. The purpose of the Customer Tracking System is to enable the PVF marketing group to track customer purchase activity and sales trends better. The WebStore project will help move the company into the twenty-first century by facilitating online furniture
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with the following cash flows if the discount rate is 14 percent? [pic] A. -$3‚140.43 B. -$929.90 C. $247.181 D. $1‚027.67 E. $1‚127.08 2. Timothy is considering an investment of $10‚000. This investment is supposedly going to provide him with cash inflows of $2‚500 in the first year and $6‚000 a year for the following 2 years. At a discount rate of zero percent this investment has a net present value (NPV) of _____‚ but at the relevant discount rate of 18 percent the project’s
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distinguished understanding of intertemporal choice we must then look berifly at the economic and psycholigical history which formed this concept and ultimatally lead to the theory of discounting utility. It is then that we will proceed to examine the discount utility model‚ or the DU model as we will refear to it. Intertemporal choice once defined by Senior as "It may be said that pure abstinence‚ being a mere negation‚ cannot produce positive effects; the same remark might as well be applied to
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SnapDeal.com -- Launched in February 2010 “Our model is to go after unsold distress inventory”‚ Kunal Bahl‚ Founder & CEO "Our target audience is between 18 and 35 years who loved to spend on the nice to have things like a good restaurant dinner‚ a soothing spa‚ or a pair of luxury sunglasses. The distributors who are not able to sell directly sell at rock bottom prices through our medium" According to Bahl‚ India’s competitive nature and low barriers to entry for starting a new business
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