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 October 31st, 2016, 02:55 AM #1 Newbie   Joined: Oct 2016 From: Accra Posts: 4 Thanks: 0 financial maths Possible,Kwaaly and Tycoon have decided to form a limited partnership firm -PKT ltd,to pursue a business idea that will be purchased from Ransford Consult.They have agreed to contribute capital in the ratio 3:2:1 respectively.The capital to be contributed by all partners will be used to purchase the business idea and equipment needed to start the business.Possible and Tycoon will contribute $22014.5 and$7338.17 respectively.The business is expects to receive $12000 as cash inflow after the first year,twice the first years amount in the second year as inflow.Third year inflow will be$5000 less than that of the second year and fourth year expected inflow will be the average of the previous year's discounted inflows.Kwaaly's father who live in UK has won a lottery worth $13000.This is to be shared equally among Kwaalys' family members; a family of four.Kwaaly's share approximate a maintenance expenditure that will be incurred by the partnership firm in year three.His parents share is equivalents to repair cost that will be incurred by the firm in a year after the maintenance work is done.The firms discount rate approximates the average growth rate of a$50000 initial investment made by Rita,Tycoon's wife,with NIB that grows by 10%,15% and 17.12% for there years. Required: Is the business worth pursuing? Pls help me in solving it
October 31st, 2016, 06:20 AM   #2
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 Originally Posted by abdul basit Possible,Kwaaly and Tycoon have decided to form a limited partnership firm -PKT ltd,to pursue a business idea that will be purchased from Ransford Consult.They have agreed to contribute capital in the ratio 3:2:1 respectively.The capital to be contributed by all partners will be used to purchase the business idea and equipment needed to start the business.Possible and Tycoon will contribute 22014.5 and 7338.17 dollars respectively.The business is expects to receive 12000 dollars as cash inflow after the first year, [and?] twice the first year's amount in the second year as inflow.Third year inflow will be 5000 dollars less than that of the second year, and fourth year expected inflow will be the average of the previous year's discounted inflows.Kwaaly's father who live in UK has won a lottery worth 13000 dollars. This is to be shared equally among Kwaalys' family members; a family of four. Kwaaly's share approximate a maintenance expenditure that will be incurred by the partnership firm in year three. His parents' share is equivalents to a repair cost that will be incurred by the firm in a year after the maintenance work is done.The firm's discount rate approximates the average growth rate of a 50000 initial investment made by Rita,Tycoon's wife, with NIB that grows by 10%,15% and 17.12% for three years. Required: Is the business worth pursuing? Pls help me in solving it
We do not usually solve problems. We provide help so that you can solve the problem.

I have tried to clean up the question so it is legible. However, the question as posed is not clear. If the question was posed in English originally, please give the exact wording.

Suggestions.

Have you constructed a table of cash flows by year?

What discount rate seems to be appropriate?

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