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##### MA140 Business Analysis

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MA140 Business Analysis;Terry, you didn't change any of your answers.... Incorrect Answers: 1a;1b, 1c, 2a, 2b, 2c, You may revise this assignment and resubmit.;Being the business manager of Media World, it has been noticed that over the period of;The last 12 months, the concern has regularly maintained cash assets of $20,000 at the;end of each month. There are many investment opportunities to invest the idle funds and;therefore it has been decided to invest a sum of $4,000. Some of the investment;opportunities has been discussed as below1 a.;What would be the future value of the CD at the end of the investment term?;1a. The future value of CD at the end of investment term is;$ 4000 x (1+.0005)^6 = $ 4012.;b.;How much interest would the investment earn for the period?;b. The interest earned for the period is ($ 4012-$ 4000) x100/4000= 0.3 %;c.;What would be the effective rate of the investment?;c. The effective rate of interest is {1+($12/$4000)}^2-1 =.6009%.;2 a.;What future value would you expect to receive at the end of 6 months?;2a. The future value of investment if invested in high interest savings account is;$4000xe^.008 = $ 4032.;b.;How much interest would the investment earn for the period?;b. The interest earned for the period is ($ 4032-$ 4000)x100/4000= 0.8 %.;c.;What would be the effective rate of the investment?;c. The effective rate of interest is {1+($32/$4000)}^2-1 = 1.6064%.;3.;Write a recommendation to the partners justifying a short-term investment of;business funds at this time, recommending one of these investments. Include your;analysis from questions 1 and 2 in your recommendation.;3.Looking at the position of idle cash, the partners should invest the sum of $4,000;in any investment opportunity but preferably in high interest savings account as the;the rate of return is higher as compared to the CD.;MA140 Business Analysis;ASSIGNMENT 06;MA140 Business Analysis;Directions: Unless otherwise stated, answer in complete sentences, and be sure to;use correct English spelling and grammar. Sources must be cited in APA format. Your;response should be a minimum of one (1) single-spaced page to a maximum of two (2);pages in length, refer to the "Assignment Format" page for specific format requirements.;Envision that you have served as business manager of Media World for over 2 years. You;have noticed that for the last 12 months the business has regularly had cash assets of;$20,000 or more at the end of each month. You have found a 6-month certificate of;deposit that pays 6% compounded monthly. To obtain this rate of interest, you must;invest a minimum of $2,000. You have also found a high interest savings account that;pays 3% compounded daily. Based on the cash position of the business at this time;assume that you decide to invest $4,000.;1.;Assume that you will invest the full amount in a certificate of deposit.;a.;b.;c.;2.;What would be the future value of the CD at the end of the investment;term? (14 points);How much interest would the investment earn for the period? (14 points);What would be the effective rate of the investment?(14 points);Assume that you decide to invest the $4,000 in the high-interest savings account.;a.;b.;c.;What future value would you expect to receive at the end of 6 months? (14;points);How much interest would the investment earn for the period? (14 points);What would be the effective rate of the investment? (14 points);3.;Write a recommendation to the partners justifying a short-term investment of;business funds at this time, recommending one of these investments. Include your;analysis from questions 1 and 2 in your recommendation. (16 points);This is the end of Assignment 06.

Paper#32110 | Written in 18-Jul-2015

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