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Homework answers / question archive / 1)Think of future as what an investment today will grow to at a certain date in the future
1)Think of future as what an investment today will grow to at a certain date in the future. so, what is the future value one year from now fpr $100 invest today for 10%?
2)
United Cruises is a medium-sized Australian cruise experience provider. United Cruises will purchase the King Voyager and Queen Spirit immediately. The cost of the King Voyager is $45 million, and the Queen Spirit costs $42 million. The King Voyager will provide a cruise experience from Sydney to South Island New Zealand. The Queen Spirit will provide a cruise experience from Sydney to North Island New Zealand. The plan is to sell the King Voyager and Queen Spirit in ten years’ time. The required rate of return for the King Voyager and Queen Spirit investment project is 9%.
We need to find the value of King Voyager and Queen Spirit in ten years time
3)What does the price of insulin in the USA tell us about MNCs' sense of public responsibility?
1)Future value = present value of cash flow * Future value factor
FV = PV * (1+r)n
Future value factor = (1+r)n
r - rate of interest = 10 % or 0.10
n - No. Of periods = 1 year
Cash flow = $ 100
Future value after 1 year
FV = $ 100 * (1+ 0.10)1
= $ 100 * (1.1)
= $ 110
if you invest $ 100 today , you have $ 110 after one year
2)Value in 10 years=Future Value=Present Value*(1+return)^t
King Voyager=45*1.09^10=106.53 million
Queen Spirit=42*1.09^10=99.43 million
3)Public responsibility is a part of Corporate social responsibilities which is very important in todays's world. Multi National Corporations (MNC) should take care of their stakeholders instead of focus on other areas to enhance their present profits. Pharmaceutical manufacturers in USA are charging very unreasonable amount from their customers for insulin as compared to other countries. It is a violation of the interest of the customers who are part of stakeholders in modern theory. To grow in long run, MNC should focus on to satisfy the needs of their customers instead of charging unnecessary price from their customers in short run. These pharmaceutical MNC's are violating the interest of general public as a monopoly. Government must take necessary steps against manufacturers of insulin and issue a standard reasonable maximum price for the insulin.
