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I-Complete Analysis
1. How was the amount of the lump-sum determined? Create a calculation that might
help Johns sister understand.
Before involving on that accident, John was working and making $200,000 per year. Not
planning for that accident, he anticipated to work for another 25 years. If he was not on that
accident and was worked for another 25 years and made $200,000 per year regularly, using the
Present Value of an Ordinary Annuity of $1 table, we could add 7% interest rate onto what he
made. Using the same table (n=25, i=7%, FV= 200,000, PV of $1= 11.65358) we would multiply
$200,000 by 11.65358. Result is $2,330,716, which is the total amount that was awarded to John.
Thus, Johns settlement will be $2,330,716.
2. Was the settlement fair? Explain. See grading rubric at end of assignment for
grading details.
In my opinion, this settlement is not fair. Due to the accident, John has already lost two years
of net income. However, the settlement is started on the date that decision was made at court. For
having a fair settlement to John, first we should find the Future Value of Annuity for 2 periods at
7%, because two years have already passed, and then find the Present Value of Annuity for
another 23 periods at interest rate of 7% for the remaining years that he would work. Using the
Preset Value of $1, the Future Value of Annuity of $200,000 for 2 periods at 7% would be
$414,000. Additionally, the Present Value of Annuity of $200,000 for 23 periods at 7% will be
$2,254,437. Thus, the final fair amount that must awarded to John is $2,668,437 not $2,330,716.
3. Write a brief reflection on how this assignment fits into your program and prepares
you for your field of study.
This chapter was my favorite topic in all the Intermediate Accounting course. This
assignment was a great live example to use all the concepts that I have learned in this
chapter to the real-life case. I really liked learning Time Value of Money and relate them
to the real-world examples. This assignment helped me to investigate and realize
diversity viewpoint on the huge topic of Time of Money and make a fair and appropriate
decision. In the beginning, while I was reading Johns story, I thought that he got a fair
settlement. However, after pondering and doing my own calculation using the deferent
tables of the textbook, I realized that his settlement was an unfair amount.
II-Upload the completed ePortfolio Assignment into your ePortfolio. (50 points)
1. Below is a suggested format for your ePortfolio My Major Course Work page. Copy
and paste it into your ePortfolio. Add a link to line acct2310 for your TVM project. Copy
the page url.
2. Go to the Canvas home page of this course and click the Submit ePortfolio link button
on the bottom of the page.
3. Click the Submit Assignment button in the top right corner.
4. Paste the url into the box and click Submit Assignment.
Note: This assignment will be graded from your ePortfolio. If it is not there no points will be
awarded.
suggested format for My Majors page:
Accounting Program
Skills I have acquired while working on my degree
(Remove any lines that do not apply to your ePortfolio. Add any assignments that you
desire. Continue to organize the Gen Ed section of your ePortfolio according to college
requirements.)
Course Course Title Assignment Name (ePortfolio Link)
#
ACCT 1110 Financial I Comprehensive Accounting Cycle Problem
ACCT 1120 Financial II Financial Analysis, calculations & written
paper
ACCT 1290 Accounting Information Quick Books accounting cycle problem
System
ACCT 2010 Survey of Financial Ethics and Financial Reporting
Accounting
ACCT 2020 Managerial Budget Project
ACCT 2040 Financial Management Project
ACCT 2050 Governmental Accounting Comprehensive Problem
ACCT 2220 Financial Statement Analysis Project
ACCT 2310 Intermediate Accounting TVM Project
ACCT 2410 Intermediate Accounting Financial Analysis Report
ACCT 2520 Federal Income Tax Comprehensive Tax Return
ACCT 2530 Cost Accounting Signature Assignment
ACCT 2540 Accounting in Practice Final Project
ACCT 2550 Accounting Capstone Project
Acct2310 Quantitative Literacy Rubric
(Your paper will be graded using this rubric)