Purchase Solution

Anna Waldheim

Not what you're looking for?

Ask Custom Question

Anna Waldheim was seriously injured in an industrial accident. She sued the responsible parties and was awarded a judgment of $2,000,000. Today, she and her attorney are attending a settlement conference with the defendants. The defendants have made an initial offer of $156,000 per year for 25 years. Anna plans to counteroffer at $255,000 per year for 25 years. Both the offer and the counteroffer have a present value of $2,000,000, the amount of the judgment. Both assume payments at the end of each year.
a. What interest rate assumption have the defendants used in their offer (rounded to the nearest whole percent)?
b. What interest rate assumption have Anna and her lawyer used in their counteroffer (rounded to the nearest whole percent)?
c. Anna is willing to settle for an annuity that carries an interest rate assumption of 9%. What annual payment would be acceptable to her?

Purchase this Solution
Solution Summary

This solution is comprised of a detailed explanation to answer what interest rate assumption have the defendants used in their offer (rounded to the nearest whole percent).

Solution Preview

Anna Waldheim was seriously injured in an industrial accident. She sued the responsible parties and was awarded a judgment of $2,000,000. Today, she and her attorney are attending a settlement conference with the defendants.
The defendants have made an initial offer of $156,000 per year for 25 years.
Anna plans to counteroffer at $255,000 per year for 25 years. Both the offer and the counteroffer ...

Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Motivation

This tests some key elements of major motivation theories.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

View More Free Quizzes
Related BrainMass Solutions

  • Anna Waldheim

    152894 P4-51 P4-51 Interest rate for an annuity Anna Waldheim was seriously injured in an industrial accident. She sued the responsible parties and was awarded a judgment of $2,000,000.

  • Choosing Alternative Settlements

    359033 Fin 320 Anna is willing to settle for an annuity that carries an interest rate assumption of 9%. What annual payment would be acceptable to her? Anna Waldheim was seriously injured in an industrial accident.

  • Various Finacne Problems

    P4-51 Interest rate for an annuity Anna Waldheim was seriously injured in an industrial accident. She sued the responsible parties and was awarded a judgment of $2,000,000.

  • Sigmund Freud and Anna O case

    245968 Sigmund Freud and Anna O case Describe and critique the traditional analysis of the Anna O. case and explain what Sigmund Freud believed he had learned from it. RESPONSE: 1. Describe and critique the traditional analysis of the Anna O.

  • Anna Freud's contributions to the field of Psychology

    Use such search phrases as influence of Anna Freud on psychiatry, or Anna Freud biography, or Anna Freud contributions to science - that sort of thing.

  • Life Insurance Proceeds

    Anna elects to cancel the policy and receives $20,000, the cash surrender value of the policy. b. Anna dies and Don receives the face amount of the policy, $50,000. c. Anna dies and Don elects to receive $15,000 per year for four years. A.

  • Finance problem: Project evaluation

    (2) please show the possible payoffs to the lender and to anna in both projects. According o your calculations, which project is preferred bu Anna? which project will the lender ant her to choose? (3) which project is relatively safe?

  • NPV of George William's machine

    Anna Taylor buys a machine for her business. The machine costs $150,000. Anna estimates that the machine can produce $40,000 cash inflow per year for the next 5 years. Her cost of capital is 12%.

  • Decision Analysis Problem for Anna Tabara

    354925 Decision Analysis Problem for Anna Tabara Anna Tabara has three major routes to take to work. She can take Market street the entire way, she can take seveal back streets to wok, or she can use the expressway.

View More Related Solutions