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In: Accounting2. Time value of money: 13 marksYou have inherited $50,000 from your Great Aunt Daisy....2. Time value of money: 13 marksYou have inherited $50,000 from your Great Aunt Daisy. You havedetermined that you havetwo different investment opportunities available to you. The moneycan be placed on depositat the bank. The interest rate you can earn is 6% compoundedannually. Alternatively, youcan invest in a business opportunity with Lima’s bakery and receivethe following cash flows(note: the cashflows are received at the end of each year):Years 1-2 $10,000 each yearYears 3-4 $12,000 each yearYear 5 $22,000Required:(a) Work out the present value of the investment at the bank andthe present value of thebusiness opportunity with Lima’s bakery using a discount rate of 6%p.a.(b) (i) Based on your present value analysis, which investmentrepresents the betteropportunity? Why? (1 mark – 50 words maximum)(ii) Explain why using 6% to calculate the present value of Lima’sbakery opportunitymay not be realistic. (2 marks – 80 words maximum)(iii) Discuss two other factors you would consider before makingyour final decision.(2 marks – 80 words maximum)(c) Discuss how inflation affects your required rate of return.