Alec inherited ₱1,000,000 from his grandparents. He planned to invest it for his future. He was offered a 45% ownership and the other one is 6.5% bond of the fast food chain that will be built on their local area. Help Alec decide by illustrating to him the two options with the different successful rate. Follow the example in the 2nd attached image. General Directions: In answering the exercises in the Learning Activityhttps://m.ytbematics Learner's Materials. Pasig City: Department ofEducation-Bureau of Leaming Resources, 2016, pp 208-216IV.Activity ProperCeneral Directions: In answering the exercises in the Learning ActivitSheet (LAS), please be reminded not to write anything here. All answeemust be written in a separate sheet of paper. Read each problem careflland answer it systematically. If solution is required, encircle your finatanswer.Exercise 1: Alec inherited P1,000,000 from his grandparents. He plannedto invest it for his future. He was offered a 45% ownership and the other oneis 6.5% bond of the fast food chain that will be built on their local area. HelpAlec decide by illustrating to him the two options with the different successfulrate. A rubric was provided beiow as your guide.srle 000,0F triouodol000.000 SOr000Ta bar000 S lovib3 CurrentieldbondLet us use the scenario below to illustrate Stocks and Bonds:Scenario: Mr. Cruz won the Philippine Charity Sweepstakes Office (PCSO)Ultra Lotto draw with the biggest jackpot of P500,000 on 5th of October 2018at 9:00 PM. He is planning to invest the money to his friend's coffee shopbranch. He can be the part owner or a lender of the new coffee shop. Whichinvestment do you think is a wise choice?Solution: Let us assume that Mr. Cruz will invest for P100,000 for 10 years.Using the two options; let us analyze the options in different level of successof the scenario of the business using the table below.Option # 1 (part owner)10 years for 50% ownershipOption #2 (lender)10 years with interest rate of 5%SuccessfulScenario(Ex.increases to PI Bilion Mr. Cruz wil have a returned of Mr. Cruz wiš have a retuned ofafter 10 yrs)ModeratelySuccessfulScenario(Ex. Branchincreases to P1 Milion P500,000 after 10 years.after 10 yrs)ModeratelyUnsuccessfulScenario(Ex Branch value Mr. Cruz will have a returned of Mr. Cruz will have a retumed ofdecreeses to P100,000 P50.000 after 10 years.after 10 yrs)50% ownershipP5,000 x 10 yTS P50,000P100,000 + PS0,000 P150,000BranchvalueP500 million after 10 years.P150,000 after 10 years.50% ownershipP5,000 x 10 yrs = P50,000P100,000 + P50,000 = P150.000value Mr. Cruz will have a returned of Mr. Cruz will have a returned ofP150,000 after 10 years.50% ownershipP5,000 x 10 yrs = P50,000P100,000 + P50,000 P150.000%3DP150,000 after 10 years.50% ownershipP5,000 x 8 yrs DP40,000P100,000 + P40,000 P140,000UnsuccessfulScenario(Ex. Branchbankrupt after 8 years) P0 or nothing after 8 years.went Mr. Cruz wil have a returned of Mr. Cruz will have a retumed ofP140,000 after 8 years.Option # 1 above is an illustration of ownership, shares or shares of stockThese words are used interchangeably which referred to stocks. If Mr. Cruzchooses this option, buying stocks, he will be buying a piece of that coffeebranch.Here are additional scenarios that can illustrate stocks:1. Mrs. Reyes bought 10,000 shares of stocks in a certain corporation whodeclared P2,000,000 for its common stock. She will be receiving adiviochare000/10 0n0200/share

Introduction: In financial accounting, ownership interest refers to the extent to which one company…

Alec inherited ₱1,000,000 from his grandparents. He planned to invest it for his future. He was offered a 45% ownership and the other one is 6.5% bond of the fast food chain that will be built on their local area. Help Alec decide by illustrating to him the two options with the different successful rate. Follow the example in the 2nd attached image.

Alec inherited ₱1,000,000 from his grandparents. He planned to invest it for his future. He was offered a 45% ownership and the other one is 6.5% bond of the fast food chain that will be built on their local area. Help Alec decide by illustrating to him the two options with the different successful rate. Follow the example in the 2nd attached image.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 1R

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