As a business owner, financial decisions require careful planning and prioritizing, especially when large, capital-intensive purchases are involved. As you establish a process to achieve your company goals, you will need to demonstrate your math skills, consider different investment options, and describe how different investment vehicles can be used effectively to accomplish business goals.
You, as a small business owner, are interested in buying a lot for $38,000. You have a CD (certificate of deposit) worth $40,000 now, which earns 4% compounded annually and will mature in 3 years. You are thinking about cashing in the CD to purchase the lot, but cashing in the CD now means you will have to pay a withdrawal penalty of $500. You project the value of the lot will be $45,000 in 3 years and you intend to use it for immediate equipment storage purposes for your business.
For your main post, you will write an essay discussing what you, as a business owner, decide to do – buy or pass on purchasing the lot. In your essay you should address the following:
- Calculate how much your CD will be worth upon maturity.
- Explain the differences (pros and cons) between these two investment options.
- Prioritize and select the best option for your business and explain why that option is preferable.
- Discuss the potential impact this choice will have on the future of your business.
- Include at least one APA formatted reference supporting your decision.
Your essay should include an introduction, conclusion, at least 3 body paragraphs, and a highly developed purpose and viewpoint. It should also be written in Standard American English and demonstrate exceptional content, organization, style, grammar, and mechanics. There should be no evidence of plagiarism. If you are unsure about what constitutes plagiarism, please review the university’s plagiarism policy.
Paragraph 1: Make this an introduction where you talk about planning and prioritizing large capital-intensive purchases in general.
Paragraph 2: Calculate how much your CD will be worth upon maturity. Put some words around this!
Paragraph 3: Explain the differences (pros and cons) between buying or passing on purchasing the lot.
Paragraph 4: Prioritize and select the best option for your business and explain why that option is preferable. Include the potential impact this choice will have on the future of your business.
Paragraph 5: This will be your conclusion! Write a few sentences wrapping up what you’ve learned about planning and prioritizing a large capital expense.
Be sure to proofread, spellcheck and include at least one APA formatted reference supporting your decision