(A Final Requirement in BMATH2: Mathematics of Investment)

Transcription

1 (A Final Requirement in BMATH2: Mathematics of Investment) Group: Group Leader: Group Members Course and Section: E Gladyz Ann B. Sacramento Nicole Marie G. Maulawin Trisha Villegas Arjeen Claire Baraceros John Edward C. Geremillo Bachelor of Science in Business Administration major in Marketing- 2B Date of Submission: April 6, 2016 Date of Presentation: Professor: Grade: April 8, 2016 Mr. Migo M. Mendoza

2 Business Profile: Company Name: Company Description: Our Mission: Chief Executive Officer: Managing Director: Managing Director and Chief Administrative Officer: Managing Director, Chief Revenue Officer: Director and Senior Investment Officer: EMPIRE Real Estate Company One of the leading real-estate companies in the Philippines that will help customers to provide information s, and find properties that is for sale or for rent (all over the country) that suits on your wanted place for business and etc. To mobilize and deliver our vast knowledge, resources and talent throughout the country on behalf of our clients, and to enable them to make the most informed real-estate decisions. Ms. Gladyz Ann Sacramento Ms. Nicole Marie Maulawin Ms. Trish Villegas Ms. Jen Baraceros Mr. Joed Geremillo

3 Client s Profile: Company Name: Company Description: Our Mission: Our Vision: Company Manager: Assistant Manager for Accounting and Finance: Assistant Manager for Auditing: Supervisor: Secretary: DC Accounting Firm Provides full-range of accounting services; Includes financial tips, links and description of services. Specializing the needs of nonprofit organizations and businesses that includes company biography, service descriptions, auditing, financial calendar and calculations. To help our clients accomplish their goals by providing the highest quality accounting, audit, tax and accounting-related professional services. The firm s vision is to be the premier accounting, tax and business, consulting firm by every measure that matters. Ms. Angelica Medina Ms. Michaela Espiritu Ms. Fhearl Vismonte Ms. Charriz Munar Mr. Alex Estrellado

4 Title of the Problem Here (A Final Requirement in BMATH2: Mathematics of Investment) I. Statement of the Problem BUSINESS LOCATION A woman just recently had her retirement. She got a P3,000, retirement fee as a manager of an accounting firm. She is planning to put up a business. Hence, she is looking for a good location of her business. However, there is a possibility that after five years she will go to Canada with her family and stay there for good. What is the best option you could provide to this type of client in choosing a good location for her business and in what payment scheme? II. Objectives III. Methodology This business report aims to: Provide the client its appropriate business location that will fit in their Accounting Firm Business and; Provide the most appropriate payment scheme based on client s capacity. 1. Client s Concerns A.) Client would like to have a proper business location that is good for 5 years. 2. Resolutions a. Definition of Payment Scheme The problem calls for a Simple Annuity Due. Annuity due is a type of annuity where the payments are made at the beginning of each payment interval, unlike the ordinary simple annuity the payment interval starts at the end of each period. Simple Annuity Due is very applicable to almost all of payment for lease agreements. As our client's request and approved by our company manager, the client will start paying their loan at the beginning of each rent period, monthly, for 5 years. b. Computation The client agreed to a Php 1, 250, worth of a five-year leasing contract for a business location. Moreover, the client agreed that our company will charge a 0.15 nominal rate of which is equivalent to an annual effective rate of 15% for leasing a business location rent.

5 The computation for period monthly rent: R due = A due i ( 1+i )- ( 1+i ) n-1 R due = 1,250, (0.0125) ( )- ( ) 1-60 R due = 1,250, (0.0125) ( )- ( ) -59 R due = 15, (1.0125)- (1.0125) -59 R due = 15, (1.0125)- ( ) R due = 15, R due = 29,370.28

6 IV. Conclusion Based on the client's capacity to pay their dues and client's request our company arrived in these conclusions: A. Php 1, 250, Lease Agreement for a business location. Our company decided to implement the Simple Annuity Due as the payment scheme for a business location for five years. This will result to Php 29, client's monthly lease. After five years of leasing this will yield to Php 1, 762, , thus our company will have a profit of Php 512, from this lease agreement. Breakdown of Profits Monthly Period In Five (5) Years From the initial amount Php 20, Php 1, 249, invested of Php 1, 250, 000, the amount of rent that the client is paying The Amount of interest the client is paying from the 15% nominal rate Php 8, Php 512, Total: Php 29, Php 1, 762, V. Recommendation After thorough investigation, our company strongly recommends these: a. simple annuity due is the appropriate payment scheme if the client and the company go on a lease agreement b. it is very important to meet the needs and wants of the clients to ensure their satisfaction; c. it is vital to ensure that while giving client's satisfaction one must not put company's profit at risk; d. it is important and essential to understand and to analyze the client's conditions regarding the agreement to prevent misunderstandings as the contract proceeds. e. It is an obligation to inform the clients about their possible liabilities and dues within the process and to clarify everything before the said agreement would start