Академический Документы
Профессиональный Документы
Культура Документы
Essays Miscellaneous
1. Virginias current wealth is $4,830,188.68 CF0=2,000,000 CF1=3,000,000 I/Y=6% Virginia can spend and consume now $4,830,188.68. If she waits to spend and consume for one year she will have $5,120,000 to spend and consume. 2. Virginia should invest $3,000,000 in Ginnys Restaurant. In one year the $4,000,000 endowment will be worth $4,240,000 without investing it. If Virginia invests $3,000,000 in Ginnys Restaurant it will give her a future cash flow of $5,460,000.00. This investment will yield the largest amount of money and the end of one year. Option 1: Invest $1,000,000. A $1,000,000 investment will have future cash flows of $1,800,000. The additional $3,000,000 that Virginia will have left after the investment will be worth $3,180,000 at the end of the year. FV=$3,000,000(1.06) FV=$3,180,000 Total cash flows at the end of year one will be $3,180,000+$1,800,000=$4,980,000.00 Option 2: Invest $2,000,000. A $2,000,000 investment will have future cash flows of $3,300,000. The additional $2,000,000 that Virginia will have left after the investment will be worth $2,120,000 at the end of the year. FV=$2,000,000(1.06)
www.studymode.com/essays/Ginny-s-Restaurant-Case-594188.html
leading learning tool. We inspire millions of students every day with over 1,100,000 model essays and papers, AP notes and book notes.
Learn More
Related essays
Ginny's Restaurant Case Study
...201-099 REV: AUGUST 15, 2001 MARK MITCHELL Ginny's Restaurant...
3 pages February 2013
...should make the investment regardless. 4. PV of investment with $3m borrowed FV...
3 pages October 2011
Ginny's Restaurant
4 pages July 2010
FV=$2,120,000
1/3
4/27/13
FV=$2,120,000 Total cash flows at the end of year one will be $2,120,000+$3,300,000=$5,420,000.00 Option 3: Invest $3,000,000. A $3,000,000 investment will have future cash flows of $4,400,000. The additional $1,000,000 that Virginia will have left after the investment will be worth $1,060,000 at the end of the year. FV=$1,000,000(1.06) FV=$1,060,000 Total cash flows at the end of year one will be $1,060,000+$4,400,000=$5,460,000.00 Option 4: Invest $4,000,000. A $4,000,000 investment will have future cash flows of $5,400,000. 3. If Virginia invests the $3,000,000 in Ginnys Restaurant then she will be unable to consume $3,800,000 that she would prefer to have immediately. By investing the $3,000,000 in Ginnys Restaurant she will... [continues]
(2011, 02). Ginny's Restaurant Case. StudyMode.com. Retrieved 02, 2011, from http://www.studymode.com/essays/Ginny-s-Restaurant-Case-594188.html
Add a comment...
Comment using...
F acebook social plugin
Products
Essays AP Notes Book Notes Citation Generator
Company
About Blog Help Jobs
Follow
Facebook Twitter Google+
Sign Up Free
www.studymode.com/essays/Ginny-s-Restaurant-Case-594188.html
2/3
4/27/13
2013 StudyMode.com
Legal
Site Map
Advertise
www.studymode.com/essays/Ginny-s-Restaurant-Case-594188.html
3/3