PROJECT 1: PORTFOLIO ANALYSIS FOR CAREER ACADEMY
Career Academy has $250,000,000 cash on hand, no anticipated income for the coming three years, and anticipated operating losses of $80,000,000 in each of the coming three years. An investment portfolio is proposed that will maintain liquidity, while earning interest income on funds on hand but not immediately required for the support of operations. In developing the proposed investment portfolio, the follow assumptions were relevant:
The minimum acceptable level of cash on had is $10,000,000
Invested funds will be immediately available upon expiration of an investment
Interest income on investments will be paid immediately upon expiration of investment
The $80,000,000 operating loss each year will be incurred in equal amount over the four calendar quarters of the year.
Interest rates, annual yields, and CD products available on 4 May 2005 will not change through the end of 2008
Funds will be invested for the longest feasible terms before shorter term investments are made
The details of the portfolio analysis for Career Academy are presented in two tables. The first table is a Portfolio Analysis Cash Summary. The second table is a Proposed Investment Schedule for Career Academy.
Career Academy Portfolio Analysis Cash Summary
Proposed Investment Schedule for Career Academy
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