# Financial Management Essay

1034 words - 4 pages

A. Compound Interest Formula:FV = P (1 + r) nFuture Value = FV, P = Principal, r = interest rate and n = number of years.
= \$500(1 + 0.06) 10a) An initial \$500 compounded for 10 years at 6 percent.
A = \$ 895b) An initial \$500 compounded for 10 years at 12 percent.
500(1 + 0.12) 10B = \$1553Present Value Calculation:PV = present Value, Principal = \$ 500, r = interest rate and n = number of yearsFormula:PV = FV/(1 + r) nThe present value of \$500 due in 10 years at a 6 percent discount rate.
PV = \$ 500 / (1 + 0.06) 10c) The present value of \$500 due in 10 years at a 6 percent discount rate.
C = \$ 279.20d) The present value of \$1,552.90 due in 10 years at a 12 percent discount rate and at a 6 percent rate.
At 6 % = \$ 867.13At 12 % = \$ 499.99Definition of Present valueThe free dictionary defines Present Value as, The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. To determine the present value, each future cash flow is multiplied by a present value factor. For example, if the opportunity cost of funds is 6%, the present value of \$500 to be received in ten year is \$ 500 /(1 + 0.06) 10 = \$ 279.20 For \$ 1552.90 due in 10 years at a 12 percent discount rate and at a 6 percent rate. The present value is \$ 867.13 % and \$ 499.99 respectively.
B Future Value of an Annuity:The Future Value of an Ordinary Annuity (FVoa) is the value that a stream of expected or promised future payments will grow to after a given number of periods at a specific compounded interest.
Formula:FVoa = PMT [((1 + i)n - 1) / i]FVoa = Future Value of an Ordinary AnnuityPMT = Amount of each paymenti = Interest Rate Per Periodn = Number of Periods2. Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1;that is, they are ordinary annuities (Also note that you can leave values in the TVM register, switch to 'BEG', press, and find the FV of the annuity due.)A) \$400 per year for 10 years at 10 percent.
FVoa =? PMT = \$ 400 I = 10 % n = 10 yearsCalculation using Excel sheet:Year12345678910Begin040084013241856.42442.043086.2443794.8684574.3555431.791Interest04084132.4185.64244.204308.6244379.4868457.4355543.1791Deposit400400400400400400400400400400End40084013241856.42442.043086.2443794.8684574.3555431.7916374.97FVoa = PMT [((1 + i)n - 1) / i]= 400[((1+0.1) 10 - 1)/0.10]= \$ 6374.97B) \$200 per year for 5 years at 5 percent.
Year12345Begin0200410630.5862.025Interest01020.531.52543.10125Deposit200200200200200End200410630.5862.0251105.126FVoa = PMT [((1 + i)n - 1) / i]= 200[((1+0.05) 5 - 1)/0.05] = \$ 1105.126C) \$400 per year for 5 years at 0 percent.
Year12345Begin040080012001600Interest00000Deposit400400400400400End400800120016002000FVoa = PMT [((1 + i)n - 1) / i]= 400[((1+0) 5 - 1)/0] = \$ 2000C: Present value for various compounding periods:3. Find the present value of \$500 due in the future under each of the following conditions:a) 12 percent nominal rate,...

## Find Another Essay On Financial Management

### International Financial Management: BHP Essay

1862 words - 8 pages Surname PAGE \* MERGEFORMAT 1 International Financial ManagementIntroductionThe management of a business organization is mandated with the responsibility of ensuring that the business organization adopts the necessary management practices in order to achieve increased performance. In the cause of business activities, business organizations come across different risks including financial risks. The financial risks in a business organization are

### Career in Financial Management Essay

1314 words - 5 pages their agencies. With a variety of other fields present, I personally feel financial management is the perfect fitting for me because I am a scholar in math, who loves dealing with money, and works well with others. There have been a bouquet of jobs that have interest me, but financial management has always been a statue because of its dependability and rapid growth. Within this paper I will key on the history and requirements of this career

### Financial Management Service

1387 words - 6 pages Introduction: Financial Management Service acts as the U.S. government's money manager. It is a very important part of the U.S. government. The FMS provides federal payment, collection, and reporting services for the government. As of today, the Financial Management Service has staffed approximately 2,100 career civil servants one third are located in Financial Centers or RFC's in Austin, TX, Kansas City, MO, Philadelphia, PA, and San

### Local Public Financial Management

877 words - 4 pages Local Public Financial Management The local public financial management is a branch of economics that involves the collection of sufficient resources from the local and public sections in a particular economies or country (Shah, 2007). The internal control of these resources is their effective and efficient management through their allocation to ensure acceptable incomes by the people and stability of the local and public economies in a given

### Financial Management and Planning

585 words - 3 pages To be a successful business owner, financial planning is instrumental in business if the owner desires to achieve insurmountable success for the long term. Financial planning in particular is concerned with the evaluation process of the business. Financial management is about establishing short and long term objectives for the business and deciding what resources will be required to achieve the necessary objectives. The primary goal for

### Functions of Financial Management

1062 words - 4 pages Financial Management has a lot to do with the duties of the financial manager working in a business. Their function can come in two approaches; one being an executive finance function which involved mainly decisions, the second is the routine finance function. These could be such things as supervision of cash receipts, safeguarding of cash balances, and custody of valuable documents, mechanical details of financing, record, reporting to top

### Financial Management Notes

1327 words - 5 pages ROLE OF FINANCIAL MANAGEMENT -     Financial management is one of the functions of management -     Financial management is concerned with o     Profits and losses of operations           o     Control over funds o     Ensuring appropriate cash flow is available o     Chas management o     Raising funds / controlling internal funds o     Investment of funds o     Cost control / pricing o     Forecasting / measuring financial

### International Financial Management

717 words - 3 pages individual nation, duty regulation's variations and difference in lawful procedures. The aim of this paper is to talk about the significance of worldwide economical management to recognize that the part which economical management is competing in a contemporary worldwide business situation, explain the international financial system, and how to apply an economical administrator at an international company. International financial management offers

### Shield Financial Management

1007 words - 5 pages Shield Financial Management is a large insurance company with a corporate office in New York and four regional offices. The company provides a variety of insurance products for businesses. A case study of Shield Financial Management reveals that the new Des Moines sales manager, Doug, has assigned leads to his sales team. The leads were generated via a lead generation program that had not been used for some time. In this process customers

### Financial Management and Analysis

2531 words - 11 pages London School of Commerce Ratio analysis and comparison of Celgene Corporation and Biogen Idec Inc. Professor William Parrott Financial Management and Analysis Nikola Sočanac 0022GZGZ1113   Table of Contents Introduction 3 Presentation of the companies 3 Ratio analysis of the companies 5 Profitability ratios 5 Liquidity ratios 7 Efficiency ratios 9 Gearing ratios 11 Investment ratios 12 Ratio analysis strengths and

### financial management as a profession

941 words - 4 pages field.It includes how to raise the capital, how to allocate it i.e. capital budgeting. Not only about long term budgeting but also how to allocate the short term resources like current assets. It also deals with the dividend policies of the share holders.The nature of financial management is the relationship with economics and accounting, as well as its functions and scope. Financial management is important in many aspects of life. One needs it for

## Similar Essays

### Financial Management Essay

1011 words - 4 pages which will help in the early stages of the project and ensure high quality contribution and completion of the project. Powerful stakeholders will help on getting the necessary resources, financial and non financial. Frequent communication with all stakeholders will ensure active support as and when needed. Project managers from the user community and from IT management. PRIORITISE YOUR STAKEHOLDERS As you identify your stakeholders there is

### Financial Management Essay

5090 words - 20 pages fiscal year 2012, an increase of 16.83% over 2011. This was the fifth consecutive year of sales increases at Medtronic (and since 2007, sales have increased a total of 32%). [30: Management 's discussion and analysis of financial condition and results of operations, Item 7, Medtronic10K, 2012] Net sales and net income (\$ in millions) 2012 2011 Change in % Cardiac and Vascular Group \$ 8,482 \$ 8,119 4.3 Restorative

### Financial Management Essay

2316 words - 9 pages in 2016. Their efforts to realize the vision defined in this plan will depend primarily on the growth strategies, and on profitability enhancement. The company has identified four Group policies: reinforcement of manufacturing capability, reinforcement of product development capability, reinforcement of global management capability, and reinforcement of overseas profitability. All group resources will be focused on these goals (NSK, 2008).The most

### Financial Data Management Essay

1115 words - 4 pages Sahira has received employee complaints about the lengthy time it takes for her team to create financial reports. Her team explains that the computers are the problem and that the software programs are too difficult to use and that many hours of manual manipulation of data are required to complete monthly reports (Colorado State University-Global Campus, 2014, p. 6, ¶3). The management dilemma can be described as: Delays in financial