Input information related to investment opportunities


Assignment Problem: One of the learning outcomes related to Intermediate Accounting 2 is to enable the students to utilize information technology in financial decision making. Within this perspective, you are required to fulfill the following requirements:

1. Collect and input the information related to the available investment opportunities.

2. Analyze the information by using Excel spreadsheets (e-tables).

3. Take the appropriate investment decision.

4. Produce a report based on the accounting information produced by the data analysis performed in requirement 3.

Available investments opportunities -

Assume that you have been hired as an accountant in Al Barakah Financial Intermediation Company. Part of your duties in your new position is managing and reporting about one the of investment portfolios of the company. Consequently, you have to deal with two of the investment opportunities.

Investment opportunity One: In 1.1.2016 Qatar Modern Electronics Company issued a 42 million dollars 10% bond as a long term investment. Assume that Al Barakah management has the intent and the positive ability to keep these bonds until maturity (December 31, 2025). For bonds of similar risk and maturity, the market yield was 8%. Interest is received semiannually on June 30 and December 31 for all the years, till maturity.

Investment opportunity Two: In 1.1.2016 Qatar International Trade Company issued a 55 million dollars 10% bond as a long term investment. Assume that Al Barakah management has the intent and the positive ability to keep these bonds till maturity (December 31, 2030). Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 12%. Interest is received semiannually on June 30 and December 31 for all the years, till maturity.

REQUIREMENTS -

Step One: Collect and input the data related to the available investment opportunities

By using an Excel spreadsheet, you are required to design an electronic table with 6 independent columns as follow:

Period

Interest Payment

Interest Revenue

Discount Amortization Or Premium

Unamortized Discount Or Premium

Carrying Value


Step Two: Data analysis by using electronic tables (e-tables)

Prepare an electronic table (e-table) for each investment opportunity.

Calculate all the values in all the columns using Excel PV Function.

Step Three: Take the necessary investment decision

You have to compare the obtained data analysis for the e-tables related to each investment opportunities. Then, you need to take the appropriate investment decision by selecting one the investment opportunities (You have to learn and understand how choose an investment over other investments by using accounting).

Step Four: Prepare a report based on the obtained accounting data produced by the data analysis

Prepare a report (two pages maxim um) that clearly indicates the results you obtained from your evaluation of the two investment opportunities and ta king particularly into account the future cash inflows or outflows of each investment separately, under the following assumptions:

1- The sale of the bond issued by Qatar Modern Electronics Company by the end of 2022 for a sum of $42,250,000.

2- The sale of bond issued by Qatar International Trade Company by the end of 2027 for a sum of $53,750,000.

Submit two documents: The Excel document of your analysis and PDF file including your report.

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Accounting Basics: Input information related to investment opportunities
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