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Financial Management
In order to determine the size of equal, annual, end period deposits needed to accumulate a specific future sum at a specific future date, several steps are required. This type of equation involves working backwards from the solution that you wish to find. Thus, if you want to accumulate $2,000,000 in ten years, this is the end result from which the remainder of the equation will be derived.
The payments are annual, equal and end of period. This fits the definition of an annuity, so it is the annuity formula that we will use to derive the required interest rate in order to bring the payments to the end result of $2,000,000 in ten years. In this example, the interest rate is to be taken as a given, and the solution derived should therefore be the sole remaining unknown variable, the size of the payment. To derive this solution, an interest rate of 8%...
is the periodic payment; n is the number of payments and I is the interest rate. Plugging in the values given, the formula would be:
2,000,000 = R [((1.08)^10 -- 1)/.08]
From this point, the bracket beside R. can be derived into a simpler numeral.
(1.08)^10 = 2.15892
2.15892 -1 = 1.15892
1.15892 / .08 = 14.4865
This leaves the original formula as follows:
2,000,000 = R (14.4865)
From which we can derive R, the periodic payment:
2,000,000 / 14.4865 = 138,059
There are a couple of important things to remember about this formula. The first is that the last principle payment, at the end of year 10, is included in the $2,000,000, but…
Financial Management of Not-For-Profit Organizations: Generally, financial management of not-for-profit organizations is similar to the process of financial management in the profit making sector in several aspects. Nonetheless, there are several major differences that contribute to a different focus of a not-for-profit financial manager. In the commercial sector, the for-profit enterprises mainly focus on capitalizing shareholder value and overall profitability. On the contrary, not-for-profit organizations have the basic aim of providing
(2009). Google's Big IPO, Five Years Later. [Article]. Wall Street Journal - Eastern Edition, 254(40), C3. Davis, H.Z., & Peles, Y.C. (1993). Measuring Equilibrating Forces of Financial Ratios. The Accounting Review, 68(4), 725-747. Google Inc. (2012). 2011 Annual Report. Mountain View, CA: Google Inc. Kirby, J. (2009). How Google really does it. (Cover story). [Article]. Canadian Business, 82(18), 54-58. Lee, M.-j. (2010). Measuring the Usage Effects of Tying a Messenger to Windows: A
Financial Management Discussion on the Three Payment-Determination Basis. The payment system describes the method by which the healthcare organizations such as Medicaid, Medicare, Commercial Health Plan and others determine the amount to be paid for a certain health program. The three payment determination bases are as follows: Cost-payment basis Fee schedule payment basis Price related basis. (Cleverley, Cleverly, & Song, 2010). A cost payment basis shows that provider's cost is the underlying method of payments and
Financial Management Calaveras Vineyards sits on 220 acres in Alameda Valley, California. Anne Clemens, a senior vice president at Goldengate Capital, received a loan proposal from Tom Howell, a managing director with NationsBank's investment-banking group. The brochure described the prospective management acquisition of Calaveras Vineyards and solicited Goldengate's participation in the $4.5 million senior financing facility. The facility would consist of a $2 million term loan and a revolving credit of
Financial Management Firm Organization False. The form of business organization direct affects the taxation structure of the firm, particularly with regard to flow-through taxation on some forms (sole proprietorship, most partnerships) and not on others (most corporations). Firm Organization False. The partners in a regular partnership have a high degree of liability. Partnership True. Most partnerships remains fairly small due to these constraints. Proprietorship True. In a sole proprietorship, the owner holds all the capital, making it difficult
03)^20]] 6. The formula for calculating the price of a zero coupon bond is P = M / (1 + I )^n In this case, the interest is priced to 9% and the term to 20 years. These figures are doubled, because the price of zero coupon bonds is based on semi-annual. Therefore, the price of this bond would be 1000 / (1 + .045) ^ 40 = 171.93. 7. We would use the