Business Analysis

Envision that you have served as trade manager of Media puting for everyplace 2 years. You have noticed that for the last 12 months the barter has regularly had cash assets of $20,000 or more at the arrest of each month. You have found a 6-month credentials of gravel that pays 6% intensify monthly. To obtain this pasture of engagement, you mustiness post a minimum of $2,000. You have similarly found a high following savings cover that pays 3% compounded daily. Based on the cash position of the business at this time, assume that you decide to ornament $4,000. 1.Assume that you get out invest the full amount in a surety of deposit. a. What would be the approaching value of the CD at the end of the enthronisation term? $4000 X 1.005^6 = $4121.51 b. How much interest would the investing catch for the period? $4121.51 4000 = $121.51 c. What would be the effectual enumerate of the enthronisation? 1.005^12-1=.0617 or 6.17% 2.A ssume that you decide to invest the $4,000 in the high-interest savings count on. a. What future value would you expect to receive at the end of 6 months? $4000 X 1.0000833^180 = $4060.43 b. How much interest would the investiture earn for the period? $4060.43 $4000 = $60.

43 c. What would be the effective rate of the enthronisation? 1.00008333^360-1 = .0304 or 3.04 3.Write a recommendation to the partners justifying a short-term investment of business funds at this time, recommending superstar of these investments. Include your analysis from questions 1 and 2 in your recommendation. A CD account has the limitation of withdraw! ing money for six months, besides savings accounts do not have the same limit. retentivity in position the financial benefit of CD account which is on the high side and has a better effective rate is also better than having a savings account, therefore my recommendation is that the CD account is preferred.

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