Finance and Investment assignemnt 1 - Assignment Example

Comments (0) Cite this document
Bank 2005 Finance and Investment Name: Course: Professor: Institution: City and State: Date: Question 1 (a) The assessable capital gain Gross capital gain= $ 15,000- $ 10,000 $ 5,000 (b) Net assessable capital gain Net assessable capital gain= Gross capital gain- Transaction costs-capital losses brought forward Net assessable capital gain=$ 5,000-0 $5,000 (c) Medicare Levy=1.5% Capital gain tax= (45-1.5)%*&5,000 $2,175 Question 2 (a) Taxable Income Tax Rate $0-$ 18,200 0% $18,201-$37,000 19% $37,001-$80,000 32.5% $80,001-$180,000 37% Over $ 180,000 45% (b) Taxable Income Tax at applicable rates Net Pay $19,000 3,610 15,390 $37,000 7,030 29,970 $ 60,000 19,500 40,500 $100,000 37,000 63,000 $ 1…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.8% of users find it useful
Finance and Investment assignemnt 1
Read TextPreview

Extract of sample "Finance and Investment assignemnt 1"

Download file to see previous pages FV W/ Cont. Compounding =PV*e^rt Where: PV= Present Value R= Rate T= Time (i) Annually FV= $ 1,000*e^(.45)(1) $ 1,046.00 (ii) 6 monthly FV= $ 1,000*e^(.45/2)(1*2) $1,046.00 (iii) Quarterly FV= $ 1,000*e^(.45/4)(1*4) $1,046.00 (iv) Monthly FV= $ 1,000*e^(.45/12)(1*12) $1,046.00 (v) Daily FV= $ 1,000*e^(.45/365)(1*365) $1,046.00 (vi) Hourly FV= $ 1,000*e^(.45/8760)(1*8760) $1,046 (c) Effective interest rate tries to determine the entire cost of borrowing. It accounts for the effect compounding interest which is excluded from the stated or nominal interest rate. For instance, a loan with 10% interest compounded monthly will actually have a rate greater than 10% since the rate is accumulated on monthly basis. Effective Rate, R=(1+I/N)^N Where: R- Effective Rate I= Stated Interest Rate N=Number of compounding periods per year (i) Annually The effective annual interest rate is similar to compounded rate since number of compounding period is one. (ii) 6 monthly R=(1+0.045/2)^2 1.0225% 2.2500% (iii) quarterly R=(1+0.045/4)^4 1.0341% 3.4100% (iv) Monthly R=(1+0.045/12)^12 1.0420% 4.2000% (v) Daily R=(1+0.045/365)^365 1.0459 4.5900% (vi) Hourly R=(1+0.045/8,760)^8,760 1.0460 4.6000% (d) R=e^n R=2.718^0.045 = 4.6000% Question 4 (a) F.V = P.V (((1+r))^n-1)/r) Where: FV – Future Value PV-Present Value R- Interest Rate N= Time taken 2,000= 1000(((1+2%)^n-1))/.02) 2,000=1,000(1.02)^n-1/.02 (1.02)^n-1=(2000/1000)*.02 (1.02)^n-1=0.04 (1.02)^n=0.04 Nlog 1.02=1.04 N=1.04/In1.02 N=1.04/0.0198 N=52.5 Years (b) 2,000= 1000(((1+5%)^n-1))/.05) 2,000=1,000(1.05)^n-1/.05 (1.05)^n-1=(2000/1000)*.05 (1.05)^n-1=0.1 (1.05)^n=0.1 Nlog 1.05=1.1 N=1.1/In1.05 N=1.1/0.0488 N=22.54 Years (c) 2,000= 1000(((1+7%)^n-1))/.07) 2,000=1,000(1.07)^n-1/.07 (1.07)^n-1=(2000/1000)*.057 (1.07)^n-1=0.14 (1.07)^n=0.14 Nlog 1.07=1.14 N=1.14/In1.07 N=1.14/0.0677 n-16.85 (d) i=2, i=5 and i=7. (5 marks) F.V = P.V (((1+i/2))^0.5d-1)/i*2) (1+0.5i)^0.5d-1=(FV/PV)i*2 (1+0.5i)^0.5d = (FV/PV)i*2+1 d *0.5e^(1+0.5i)=(FV/PV)i*2+1 d = (FV/PV)i*2+1 0.5e(1+0.5i) Illustration: D= (2000/1000)*2*2+1 (0.5*2.718*(1+0.5*0.02) =9/2.269 =3.967 or 4% D= (2000/1000)*2*5+1 (0.5*2.718*(1+0.5*0.05) =21/2.09 =10.05 or 10% D= (2000/1000)*2*7+1 (0.5*2.718*(1+0.5*0.07) =29/2.07 =14% (e) F.V = P.V (((1+i/2))^0.25d-1)/i*4) (1+0.25i)^0.25d-1=(FV/PV)i*4 (1+0.25i)^0.25d = (FV/PV)i*4+1 d *0.25e^(1+0.25i)=(FV/PV)i*4+1 d = (FV/PV)i*4+1 0.25e(1+0.25i) Question 5 Global Financial Crisis (GFC) with explanation of securitization and discussion on the role it played in the beginning of the GFC. Global financial crisis is about the failure of global major financial institutions. The global financial crisis originated form in the United States (US) when investors lost confidence in mortgages ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Finance and Investment assignemnt 1 Assignment Example | Topics and Well Written Essays - 1000 words”, n.d.)
Finance and Investment assignemnt 1 Assignment Example | Topics and Well Written Essays - 1000 words. Retrieved from
(Finance and Investment Assignemnt 1 Assignment Example | Topics and Well Written Essays - 1000 Words)
Finance and Investment Assignemnt 1 Assignment Example | Topics and Well Written Essays - 1000 Words.
“Finance and Investment Assignemnt 1 Assignment Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Finance and Investment assignemnt 1

Finance: Investment Banking

...?Finance: Investment Banking Table of Contents Table of Contents 2 Company Overview 3 Major products and services 4 Analysis of the Income ment & Balance Sheet 5 Computation of ratios 9 Tier 1 & Tier 2 Capital 15 Key Competitors 16 Analysis of business news 17 Conclusion 18 Reference 19 Bibliography 21 Annexure 22 Company Overview UBS is a financial services company with a global presence offering a wide variety of financial services to the global businesses and private clients. The services offered by the bank are reflective of the worldwide financial markets. UBS has set offices in all the prominent financial hubs. This includes United States, South America, Canada, Switzerland, Middle...
20 Pages(5000 words)Research Paper

Principles of Finance 1

... of the earnings should be plowed back to the company and how much should be declared as dividends and shared to its stockholders. The principles of finance emphasizes that a company must only invest in projects which will be profitable to the company. In the end, every finance manager’s objective is to maximize the value of the firm. And maximizing the value of the firm means making wise investment, financing and dividend decisions. References Brigham, E. & Gapenski, L. (1996). An overview of financial management. Financial management: Theory and Practice (p. 1-5). The Dryden Press. What is corporate finance? Retrieved 16 April 2011. ? Principles of...
2 Pages(500 words)Term Paper


...Economic Crisis Dubai is that part of the world, which was heavily affected by the current economic recession. The most affected sector in Dubai was real estate. “The real estate bubble that propelled the frenetic expansion of Dubai on the back of borrowed cash and speculative investment, has burst” (Lewis). Many companies had to stop their large-scale construction projects due to adverse impact of economic crisis on the economy of Dubai. A large part of the government’s spending was also in the real estate construction and development sector. With this decrease in the flow of capital, the economy of Dubai became relatively slow. Therefore, this is also an important factor why most of the entrepreneurs find it difficult...
8 Pages(2000 words)Essay

Investment project- Finance

...? Investment project- Finance s Investment and risk are the two sides of a same picture. If a coin is tossed then there is always a risk associated with the same. There are number of things associated with the same. According to the provision, it is found, when there is investment, and then there would be a provision of risk as well. Data of five different stocks have been taken into consideration for the same and 5 years of data have been taken into account. Different statistics provision could be taken into account for the same like Average return, Standard Deviation, Correlation and other. Making a portfolio always give something extra ordinary to the investor and...
5 Pages(1250 words)Essay

Finance and Investment

...of the indicators used to identify the coefficient. Basically, considering the inflation rate changes the value of the principal as time progresses. Usually, the interest rate changes the amount that is expected to be gained from an investment when the benefits of the venture are realized in an installment basis. Second, the interest rates are also valuable aspects in determining of the coefficient. This happens when the project is financed by debt. It is imperative that the interest rate will serve as factor. Question 3 A. Usually, senior executives view the different valuation methods to be similar. The most extensively used among the schemes is the Discounted Cash Flow (DCF) because of its...
6 Pages(1500 words)Essay

Communication Assignemnt

...Language and Communication Introduction Considering language and communication, it seems that all children are born with the ability to learn and learn quickly various methods of connecting with their caregivers and others. This type of communication is necessarily based on physical actions and tone of cry when the child is very small, but as they grow older, children begin to demonstrate that they understand gestures and the words of others even before they have voiced their first word. According to Gordon Wells (1986), the entire function of learning language and interacting socially is necessary in order to make connections with other people and help the individual make sense of their experiences. “Language occurs through... and...
11 Pages(2750 words)Essay


...strengthen business relationships, and trigger information visibility. In a business-to-business e-commerce environment, tighter long-term relationships between tiers of stakeholders are vital to the success of products or services. Generally, e-commerce is associated with sales and procurement activities. However, in this case it goes beyond to collaborative product development, forecasting, production planning, and management of inventory (Cassivi et al., 2005). Human capital of higher quality can enable firms to increase the range of various activities, and enhance their abilities to increase returns. Figure 1. Advances in the Telecommunications Sector (Cassivi et al., 2005) The Role of Knowledge Management in the...
8 Pages(2000 words)Essay

Unit 1 Lab Assignemnt

... Networking DHCP configuration is an important process that any networker should understand. It involves a step by step process (It Essentials: Pc Hardware and Software Companion Guide 34). In this writing, I will go through the objectives of the steps and importance of understanding each step. Authorizing a DHCP server enables the server to lease IP addresses to clients. Creating a scope sets a range of IP addresses that the DCHP leases to the clients (Bender 27). Creating an exclusion range of IP addresses on the other hand sets a range of IP addresses that one would not like to be offered by the DCHP. To enable a DHCP client to use an address permanently, one creates client reservations. DHCP options pass additional IP setting... Networking...
2 Pages(500 words)Coursework

Unit 1 Lab Assignemnt

... Networking DHCP configuration is an important process that everyone who purposes to set up a network should clearly understand. It involves a step by step process which should be perfectly done to prevent any problems to the network being configured. In this writing, I will go through the objectives of the steps and highlight the importance of understanding the purpose of each step (It Essentials: Pc Hardware and Software Companion Guide 34). Authorizing a DHCP server is among the first step in DHCP configuration. This enables the server to lease IP addresses to DHCP clients. Creating a scope sets a range of IP addresses that the DCHP leases to the clients (Bender 27). Creating an exclusion range of IP addresses, on the other... Networking...
2 Pages(500 words)Coursework

Investment Finance-II Assignment

...INVESTMENT FINANCE-II ASSIGNMENT Contents Contents 2 Part A 4 Answer HPR, AAR and GAR 4 a) 4 b) 5 c) 5 d) 6 e) 6 Answer – 2: Daily Value at Risk 6 a) 7 b) 7 Answer – 3: Portfolio Selection 7 a) 7 b) 8 c) 8 Answer – 4: The Capital Asset Pricing Model 9 Part – B 9 1. Modern Portfolio Theory 9 2. The Capital Asset Pricing Model 11 3. The CAPM and Multifactor Models 13 References 15 Part A Answer – 1: HPR, AAR and GAR The company selected for Part - A is AMP Ltd. It is a financial services company headquartered in Sydney, Australia. a) The monthly HPR (Holding Period Returns) can be calculated using the following formula: HPR = (end period value – initial...
11 Pages(2750 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Finance and Investment assignemnt 1 for FREE!

Contact Us