Sara Gandhi is a 50-year-old entrepreneur with a great idea of developing a new computer software product that will help users communicate using the next-generation magnet. Sara owns a software company registered as S corporation. S Corp is a special designation that allows small businesses to be taxed as if they were a sole proprietorship or a partnership rather than as a corporation whilst at the same time enjoying limited liability of a corporation. Sara is satisfied with this choice because she is aware that one of the disadvantages of a corporation is the double taxation of corporate earnings. Sara is determined to make sure her business succeeds. She has a long-term plan of expanding the business to some emerging countries. She has been reading some articles in finance journals about time value of money and how she can apply the concept to manage her finances and expansion plans. The time value of money holds that it is better to receive money sooner than later. Money that is available today is worth more than money to be received in the future. This is so because money in hand today can be invested to earn a positive rate of return, thereby producing more money in the future.
Sara has approached you for help in answering the following personal and business-related questions:
1. Suppose Sara has $150,000 to invest in an individual retirement account (IRA) at an interest rate of 8% per year for her retirement in 15 years. How much money can she accumulate at the end of the time period?
2. Sara wants to send her two-year old daughter to college in 16 years. She has assumed that she would need $120,000 at the time in order to pay for her tuition, room and board, school supplies etc. If she can earn an average of 8% per year, how much money does she need to invest today as a lump sum to achieve that goal?
3. Sara wants to move $60,000 from her checking accounts and invests it in money market securities for 5 years. The money market earns 8% interest compounded annually. How much can this investment grow at the end of the investment period?
4. Sara wants to find the present value of the following uneven cash flows she expects to receive in the next 3 years from her business.
What is the present value of the cash flows assuming the discount rate is 7%?
5. Sara is considering a perpetuity that pays $100 a year. If the interest rate is 6%, what is the value of the perpetuity?
6. Sara also wants to invest in preferred stocks issued by Camden Company. The company is about to pay $3 dividend per share on its stock. Investors anticipate that the annual dividend will rise by 6% a year forever. If Sara requires a rate of return of 11% on the stock, what is the current price of Camden stock?
7. Sara’s software company is thinking of buying a real estate property for $400,000 with the intention of selling it at the end of the year. The company expects that the property will be worth $480,000 in one year. If the interest rate is 10%, should the company buy the property?
8. Should the company purchase the property if the interest rate is 25%?
9. Sara’s company wants to calculate the end-of-the year wealth if the company receives an annual rate of 24% compounded monthly. Calculate the effective annual rate.
10. If an annual percentage rate of 24% is compounded quarterly, what is the effective annual rate for Sara software company?
Why Work with Us
Top Quality and Well-Researched Papers
Our writers have been trained on how to handle papers placed by our clients. The writer must read and understand before embarking on writing the papers. In case of any issue that needs clarification, writers are encouraged to ask the client or support.
Professional and Experienced Academic Writers
Our team comprises of the best writers and editors. We do thorough vetting during recruitment to make sure that our writers have the knowledge and experience we aspire in the team.
Free Unlimited Revisions
Our aim is to give the client the best outcome. If for some reason you are not satisfied with the wok done, you can ask the paper to be revised or rewritten. This will be done to your satisfaction with no extra charges.
Prompt Delivery and 100% Money-Back-Guarantee
We have writers who work round the clock. This helps in making sure that all our clients’ papers are delivered on time. If we have issues with the deadline, we will ask for extension. If its not possible, the money is fully refunded.
Original & Confidential
Our clients’ confidentiality is highly respected. We can never disclose our clients’ details to third parties. In the same regard, we strive to give our clients 100% original papers. We do not tolerate plagiarism from our writers.
24/7 Customer Support
Clients can reach us any time of the day, and any day of the week. There is a live chat, email or phone numbers to help in ease of communication.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
You should never be worried about your papers even in the middle of the night. Our team will work round the clock to deliver.
We have an able team that can deliver your work in the shortest time possible. The academic level or the type of work should never be a hindrance. Our highly competent support team is always around (24/7) to give you any assistance you may need.
Admission Essays & Business Writing Help
Do you need to be admitted in your dream institution but find it challenging to write an admission essay? Our team is in a position to write the best letter that will guarantee you an admission. We do as well write the best business proposals and reports.
Writing can be fun and enjoyable when everything has been done right. Writing is not just enough without proper editing and proofreading. We have a team of editors that ensure everything falls in place, whether its issues to do with grammar or referencing styles.
Once the paper has been done and submitted, that is not the end of it. You can always ask for amendment or improvement if you feel something has not been done right. Our team of writers and editors will gladly assist you to your satisfaction. Revision is free of charge.