Business Analysis

Envision that you have served as trade manager of Media puting for oer 2 years. You have noticed that for the last 12 months the personal credit line has regularly had cash assets of $20,000 or more at the rick of each month. You have found a 6-month credentials of make that pays 6% increase monthly. To obtain this pasture of engagement, you mustiness drape a minimum of $2,000. You have in any case 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 cloak $4,000. 1.Assume that you get out invest the full amount in a surety of deposit. a. What would be the early value of the CD at the end of the investing term? $4000 X 1.005^6 = $4121.51 b. How much interest would the investiture ingest for the period? $4121.51 4000 = $121.51 c. What would be the effectual enumerate of the investing funds? 1.005^12-1=.0617 or 6.17% 2.Assume that you decide to invest the $4,000 in the high-interest savings delineate. 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 coronation earn for the period? $4060.43 $4000 = $60.

43 c. What would be the effective rate of the investment? 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 psychoanalysis from questions 1 and 2 in your recommendation. A C D account has the limitation of withdrawing ! money for six months, besides savings accounts do not have the same limit. retentivity in spot the financial benefit of CD account which is on the higher(prenominal) 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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