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Annuity

Calculating Present and Future Value

ASSIGNMENT 1 The objectives of this assignment are: i. Determine the present value solutions to period, interest, and payments. ii. Calculate the future value solutions for period, interest, and payments. iii. Determine the answers relating to annuity, perpetuities, and annuity due problems. iv. You must submit your backup

What is the issue price of the bonds?

On January 1, 2014, Marino Corporation issued eight year bonds with a face value of $5,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are: Present value of 1 for 8 periods at 6%...................................... .627 Present value o

Concepts of the Time Value of Money

Define and discuss the importance of the following time value of money concepts including compounding (future value), discounting (present value) and annuities. Why do organization leaders need to understand these concepts?

Calculating Annuity

You are 35 and you want to retire in 30 years and be able to withdraw $50,000 for each year in retirement. You expect to live to the age of 85. How much do you need to invest at 9.5% each year?

Time Value of Money: Annuity Cash Flows

Answer the following questions and complete the following problems, as applicable. Unless otherwise directed, assume annual compounding periods in computational problems. You may solve the following problems algebraically, or you may use a financial calculator or Excel spreadsheet. If you choose to solve the problems algebrai

Evaluate the given settlement offers.

You are considering three insurance settlement offers. The first offer includes annual payments of $5,000, $10,000, $15,000, etc., where the payment for each year is $5,000 more than the payment for the previous year, over the next ten years. The first payment of $5,000 will be made exactly one year from today and the last payme

Single Page Case Study: Lisa Aham, Manager of a McDonald's Restaurant

After evaluating Lisa's current strategy regarding senior citizen market, would this strategy improve this particular McDonald's image? what would Lisa do about the senior market - i.e. should she encourage, ignore, or discourage her seniors? What should she do about the bingo idea? An explanation of all this would help in fi

Regional CEO's question about reducing employee costs

Assuming that I am the assistant manager my role is to deal with HR issues that arise routinely in the workplace. I must deal with the following issue: e-mail was sent to me from the Region's Chief Executive Officer (CEO), who is looking for ways to reduce employee costs. The key comments in the memo included: Nearly 40%

Debentures - Yield to Maturity and Yield to Call

6. BCC has issued 8? percent debentures that will mature on July 15, 2030. Assume that interest is paid and compounded annually. If an investor purchased a $1,000 denomination bond for $1,025 on July 15, 2010, determine the bond's yield to maturity. Explain why an investor would be willing to pay $1,025 for a bond that is going

Time Value Analysis

Capital Budgeting and Investment Decisions 1. Find the following values for a lump sum assuming annual compounding: a). The future value of $599 invested at 8 percent for one year. b). The future value of $500 invested at 8 percent for five years. c). The present value of $500 to be received in one year when the opportu

Case study of Bernard Madoff

In a narrative format, discuss the key facts and critical issues presented in the case. 1. Do you think Bernard Madoff engaged in creating a Ponzi scheme because of greed or did he employ it as a short term strategy and just caught up in a process that he could not reverse? 2. What were the elements that led to him so succ

Break Even Analysis Accounting

Break-Even Analysis: Your buddy comes to you with a sure fire way to make some quick money and help pay off your student loans. His idea is to sell T-shirts with the words "I get" on them. "You get it?" He says, "You see all those bumper stickers and T-shirts that say, 'got milk' or 'got surf'. 'So this says, 'I get.' It's funny

Present Value of Ordinary Annuity

1.) On January 1, 2004, Carly Company decided to begin accumulating a fund for asset replacement five years later. The company plans to make five annual deposits of $30,000 at 9% each January 1 beginning in 2004. What will be the balance in the fund, within $10, on January 1, 2009 ( one year after the last deposit)? The followin

Investing and Weighted Cost Problems

1.) A client is 20 years from retirement and desires to invest today for a $35,000 retirement annuity beginning one year following his retirement and continuing for 15 years in his retirement. The client requires an average 8 percent return over the entire term. What lump sum does the client need to invest today? What annuity am

The Present Value of Bond Principal

On January 1, 2010, Ellison Co. issued 8-year bonds with a face value of 1,000,000 and a stated interest rate of 6% payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are as follows: Present value of one for eight periods at 6% .627 Present value of one for eight periods a

PV of the quarterback

A famous receiver just signed a $10.4 million contract providing $2.6 million a year for 4 years. A less famous receiver signed a $9.4 million 4-year contract providing $3 million now and $1.6 million a year for 4 years. The interest rate is 8%. a. Calculate the PV of the quarterback. (Do not round intermediate calculation

29) In 2008 a faculty member at a private college received a grant from the National Science Foundation to conduct basic research on tree frogs in the amount of $350,000. Expenses associated with the grant totaled $225,000 in 2009. In the Statement of Activities for 2009, the college should show: A. revenues of $225,000 and expenses of $225,000 in Unrestricted Net Assets B. revenues of $350,000 and expenses of $225,000 in Temporarily Restricted Net Assets C. expenses of $ 225,000 in Unrestricted Net Assets and a decrease in Temporarily Restricted Net Assets of $ 225,000 D. revenues of $225,000 and expenses of $225,000 in Temporarily Restricted Net Assets 30) All the following choices are considered a split-interest agreement, according to the Not-for-Profit Guide EXCEPT: A. charitable gift annuities B. permanent income-sharing agreements C. pooled (life) income funds D. charitable remainder trusts 31) All the following choices would be considered a special-purpose government for financial reporting purposes EXCEPT: A. a public hospital B. an art museum C. a county board of supervisors D. a public school system 32) Special purpose local governments engaged only in fiduciary-type activities are required to prepare all of the following financial reports EXCEPT: A. Statement of Changes in Fiduciary Net Assets B. Statement of Cash Flows C. MD&A D. Statement of Fiduciary Net Assets 33) A public college had tuition and fees of $20,000,000. Scholarships, for which no services were required, amounted to $2,000,000. Graduate assistantships, for which services were required, amounted to $1,000,000. The amount to be reported by the public college as net tuition and fees would be: A. $18,000,000 B. $19,000,000 C. $17,000,000 D. $20,000,000

29) In 2008 a faculty member at a private college received a grant from the National Science Foundation to conduct basic research on tree frogs in the amount of $350,000. Expenses associated with the grant totaled $225,000 in 2009. In the Statement of Activities for 2009, the college should show: A. revenues of $225,000 an

Differences between perpetuities and annuities

Describe the differences between perpetuities and annuities. Give examples of both types of products. https://personal.vanguard.com/us/funds/byobjective/detail?category=LifeCycle http://www.johnhancock.com/products/annuities.html ? Find one example of a perpetuity. ? Find one example of an annuity. ? How is the perpetu

Description of Managerial Accounting Questions

1. Grogan Manufacturing is working on two jobs. Cost is accumulated under a job order cost system, and overhead is applied on the basis of direct labor hours. The company estimated that overhead would be $32,000 and 10,000 direct labor hours would be worked. Both projects were started and completed in the current accounting peri

Account balances, interest compounded & time value of money

1). A corporation has the following account balances. Common Stock, $1 par value, $40,000;Paid in Capital in Excess of Par Value, $1,800,000. Based on this information, the __a). average price per share issued is $4.60 __b). legal capital is $1,840,000 __c). number of shares issued is $40,000. __d) number shares out

Present Value and Annuities

Problem 4 1) You will receive $4,000 three years from now. The discount rate is 10 percent. One year at 10% n =0.909 Two year at 10% n = 0.826 Three year at 10% = 0.751 a) What is the value of your investment two years from now? Multiply $4,000 X .909 (one years discount rate is 10 percent). b) What is the value of

Tax accounting

1. Howard and Beatrice plan to marry either immediately before or immediately after year-end. Howard's taxable income for 2010 is $89,000 and Beatrice's is $85,000 before their exemptions and deductions. Neither has any dependents nor itemized deductions. Based only on tax considerations, what marriage date would you recomme

Taxation: 14 multiple choice questions

1. Which of the following represents the largest percentage of state tax revenue? Sales tax Individual income tax Other Property tax None of the above 2. Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue? Issue treasury bonds Cut funding to variou

Fundraising and endowments

1. Discuss how the findings of the "Corporate Philanthropy: The Age of Integration" study at http://www.philanthropy.iupui.edu/Research/Corporate%20giving-Target%20project%20July%202007.pdf could impact a fundraiser's approach. Outcome: Recognize the major components of a comprehensive development program focusing on indiv

On December 31, 2009, TERVO Company accepted Rudolph Company's

Question: On December 31, 2009, TERVO Company accepted Rudolph Company's $20,000, 3-year note, paying 6 percent annually on December 31, as full payment for a specialty piece of equipment. The market rate of interest for similar notes is 10 percent. The following data is provided:

Calculating the Market Value of Bonds

1. On August 1, 2002, Kathy purchased $18,000 of ISD Co.'s 18%, 14-year bonds at face value. ISD Co. has paid the semiannual interest due on the bonds regularly. On August 1, 2006, market rates of interest had fallen to 16%, and Kathy is considering selling the bonds. Using the present value tables (Table 6-4 and Table 6-5),

36 Accounting multiple choice questions

1) Why are certain costs of doing business capitalized when incurred and then depreciated or amortized over subsequent accounting cycles? A. To aid management in cash-flow analysis B. To match the costs of production with revenues as earned C. To reduce the federal income tax liability D. To adhere to the accoun