WMBA 6070 Long Term Working Capital Report
Order ID:89JHGSJE83839 Style:APA/MLA/Harvard/Chicago Pages:5-10 Instructions:
WMBA 6070 Long Term Working Capital Report
LONG-TERM WORKING CAPITAL CONSIDERATIONS: TIME VALUE OF MONEY AND BONDS (1–2 PAGES, PLUS CALCULATIONS IN EXCEL)
Future Value: If the company deposits $2 million in a bank account that pays 6% interest annually, how much will be in the account after 5 years?
Present Value: What is the present value of a security that will pay $29,000 in 20 years if securities of equal risk pay 5% annually?
Required Interest Rates: The company owner has said she will retire in 19 years. She currently has $350,000 saved and thinks she will need $800,000 at retirement. What annual interest rate must she earn to reach that goal, assuming she does not save any additional funds?
Future Value of an Annuity: Find the future values of these ordinary annuities. Compounding occurs once a year.
$500 per year for 8 years at 14%
$250 per year for 4 years at 7%
$700 per year for 4 years at 0%
Present Value of an Annuity: Find the present values of these ordinary annuities. Discounting occurs once a year.
$600 per year for 12 years at 8%
$300 per year for 6 years at 4%
$500 per year for 6 years at 0%
Bond Valuation: The company has two bonds in their investment portfolio, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.2%. Bond C pays an 11.5% annual coupon, while Bond Z is a zero-coupon bond.
Assuming that the yield to maturity of each bond remains at 8.2% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Explain any observed differences from the pricing calculations of the two bonds.
Years to MaturityPrice of Bond CPrice of Bond Z4 3 2 1 0
Yield to Maturity and Yield to Call: The owner is interested in investing some retained earnings in corporate bonds. She is considering the following:
Bond A has a 7% annual coupon, matures in 12 years, and has a $1,000 face value.
Bond B has a 9% annual coupon, matures in 12 years, and has a $1,000 face value.
Bond C has an 11% annual coupon, matures in 12 years, and has a $1,000 face value.
Each bond has a yield to maturity of 9%.
- Before calculating the prices of the bonds, identify whether each bond is trading at a premium, at a discount, or at par.
b. Calculate the price of each of the three bonds.
c. Calculate the current yield for each of the three bonds.- WMBA 6070 Long Term Working Capital Report
WMBA 6070 Long Term Working Capital Report
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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