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Graded Discussion Board

Financial Management (MGT201)

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This is to inform that Graded Discussion Board (GDB) No. 01 will be opened on November 15, 2016 for discussion and last date for posting your discussion will be November 21, 2016. This Graded Discussion Board will cover lesson # 01 to 08.

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Replies to This Discussion

Topic of Discussion will be

“Time Value of Money”.

Have u solved :? 

Please Discuss here about this GDB.Thanks

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

Topic: Time Value of Money

Learning Objective:

By attempting this GDB, students will be able to calculate the Time Value of money and to understand its importance in financing and investing decisions.

Graded Discussion Question:

Mr. Ali has just been informed by the lottery officials that he has won a lottery. It has been mentioned in the letter that he has to choose between one of the two given alternatives as his Prize money:

A: Rs. 5,000 every year for next 20 years or;

B: Rs. 90,000 after 12 years

If appropriate discount rate is 8%, then

  1. Find the value of each alternative.
  2. Based on the value calculated in first part, suggest which alternative is acceptable for Mr. Ali and why?

NOTE:

You are required to provide complete calculations along with formulas, otherwise marks will be deducted. Also avoid unnecessary details.

Important Instructions:

  • Post your GDB comments (answer) against GDB # 01 rather than against lessons’ MDB.
  • Your discussion must be based on logical facts.
  • Do not copy or exchange your answer with other students.  Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
  • Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references.
  • Obnoxious or ignoble answer should be strictly avoided.
  • Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB.
  • For Detailed Instructions, please read the GDB # 01 announcement

 

PV = FV /(1+rate)n

= 90000/(1+0.08)12

6944.44

Greater than Present Value 5000

Kya ye method thk ha. i mean me nay ye just idea k liye post kiya hai.. Comment plz

Correct formula kia hy????

Zeeshan  look  1.08^12=2.51817

Then 90000/2.51817 = 35,740.24

Thanks Suny Bro :) 

Feeling Confused 

Plz koe to help kara

Feeling Confused 

A part is constant cash flows its mean this is annuity,so try to use annuity formula for calculating pv of constant cash flows,

which is  Pv=5000[1-1/(1+.08)^20)/.08]

             pv=490,90 Rs.

option B pv is

Pv=Fv/(1+i)^n

Pv=90,000/(1.08)^12

Pv=35,740 Rs.

2).  Option A is acceptable for Mr.Ali because the pv of 1st alternative is more than second.So it is more feasible for him.

now no more confusions.Stay happy all and Allah paak bless u all.

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