n addition to the projects evaluated above, Micron Industries is considering several other savings and financing options in an effort to expand operations and improve overall efficiency of operations, while fully investing idle cash.
In addition to the projects evaluated above, Micron Industries is considering several other savings and financing options in an effort to expand operations and improve overall efficiency of operations, while fully investing idle cash.
(a) Based on
Investment Alpha Annual Interest Rate of 8.5%, compounded semi annually
Investment Beta Annual Interest Rate of 8.25%, compounded monthly
Investment Gamma Annual Interest Rate of 7.96%, compounded daily
Required:
i. Advise the company on the best investment option for the maturing funds.
ii. Based on your choice from part (i), if Micron Industries invests the lump sum of $20,000,000 on December 2, 2020 and leaves it in the account for 4 years, what will be the value of the investment on December 1, 2024?
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