ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.8 : Cash flow agreement where the sign + or - of the amounts are start negative and at a point switch to positive and stay positive is referred to has an investment. The cash flow could be denoted by the symbol of [a, b, c ...]. Consider the following two cases in a biochemical factory : (a) You pay $1 today. You receive $1.05, one year from now. (b) You pay $3 today. You receive $5, one year from today. You pay $2, two years from today. Determine if cases (a) and (b) are an investment or a business transaction with cash flow symbol. Find the interest rate r in the cash flow in both cases (a) and (b).
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.8 : Case (a) : An investment [-1, 1.05]. Let 1.05 = 1 (1 + r), r = 0.05 or 5 %. Case (b) : A business transaction [-3, 5, -2]. Let 5 (1 + r) = 2 + 3 (1 + r) ^ 2, 3 (1 + r) ^ 2 - 5 (1 + r) + 2 = 0. Let s = 1 + r, then 3s ^ 2 - 5s + 2 = 0 = (3s - 2) (s - 1). Then s = 2 / 3 or 1. When s = 2 / 3, r = s - 1 = 2 / 3 - 1 = - 1 / 3 or - 33.33 %. When s = 1, r = s - 1 = 1 - 1 = 0 %. Let ^ be the symbol of power. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
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Question 99 - (a) The quantum number m is given by m = -s, -s + 1. If s = 0.5, find the values of m. (b) | T > = (cos T) | V > + (sin T) | H >. The V and H states form a basis for all polarizations. Let cos T = 0.8. (i) If (sin T)(sin T) + (cos T)(cos T) = 1, find the value of sin T. (ii) For | T > = a | V > + b | H >, where a x a represents the probability of | V > and b x b represents the probability of | H >. Which one is more abundant, | V > or | H >? (iii) Find the value of T without using any mathematical tools.
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ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.19 : In the purchase of a unit of engineering office, a loan has been made to a bank with the following details : Term N = 30 years; interest rate R = 8.07 % / year; security : primary residence; present value pv = $450000; salary = $75000 / year or $56000 / year after tax. (a) Let the discounted present value PV = [ 1 - 1 / (1 + r) ^ n ] / r for arrears, where r = interest rate of discount, n = number of payment, ^ = symbol for power. If the loan repayment was made monthly : (i) calculate the value of r where r = R / k and R is in decimal value; (ii) find the value of n where n = kN; (iii) estimate the value of k where k = number of repayment per year; (iv) calculate the value of PV based on the formula of discounted present value. (b) Calculate the monthly repayment of the loan, MR based on the following formula : pv = PV x MR. (c) Find the percentage of salary remains after paying the loan every month.
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