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Annuity

Valuing Bonds Using Present Value

Please help! Using the attachments for detail, can you help me with this question and any on the attached JPG files? Use the present value tables in the appendix (files attached) on the future value and present value tables to calculate the issue price of a $600,000 bond issue in each of the following independent cases. Assum

25 Accounting Multiple Choice Questions

Please explain the choices. A) Which of the following is not considered cash for financial reporting purposes? a. Petty cash funds and change funds b. Money orders, certified checks, and personal checks c. Coin, currency, and available funds d. Postdated checks and I.O.U.'s B) Which of the following methods of determin

Compound interest vs annuity: Calculations for option 1 and 2. Which is better?

As a financial planner a client comes to you for investment advice. After meeting with him and understanding his needs, you offer him the following two investment options: Option 1: Invest $20,500 in a savings account at 5.4% interest compounded quarterly. Option 2: Invest into an ordinary annuity where $4,500 is deposi

Compare Periodic Payments to a Lump Sum

Carolyn Ellis is setting up an annuity for her retirement. She can set aside $2,000 at the end of each year for the next 20 years and it will earn 6% annual interest. What lump sum will she need to set aside today at 6% annual interest to have the same retirement fund available 20 years from now? How much more will Carolyn need

BUS MATH: 15 ordinary annuity and annuity due problems

1. $111,834 is the amount of an ordinary annuity of $6,000 for 4 years at 8% compounded quarterly. () True False 2. The monthly payment of rent is an example of a renter's annuity. () True False 3. A contingent annuity has a specific number of payment periods. () True F

Time Value of Money Annuities Calculations

If you put up $21,000 today in exchange for a 9.25 percent, 17-year annuity, the annual cash flow will be $ . (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Your company will generate $61,000 in cash flow each year for the next 9 years from a new information database. The computer system ne

PV of cash flows

See attached format. RAP Manufacturing, Inc. produces microwave ovens, electric ranges, and freezers. Due to increasing competition, President Bob Pearson is considering investing in a computer-aided manufacturing (CAM) system. The company's microwave plant has been selected for initial evaluation. The CAM system for the m

50 MC Questions: TVM concepts, cost accounting, budgeting, analysis, ratios

1. Which following statement is true? a. The present value of a future dollar is worth less than one dollar. b. The present value of a future dollar is worth more than one dollar. c. The present value of a future dollar is equal to one dollar. d. The present value of a future dollar cannot be determined. 2. The accountant

Numerous Present and Future Value Problems

3.19 How much money was deposited each year for 5 years if the account is now worth $100,000 and the last deposit was made 10 years ago? Assume the account earned interest at 7% per year. 4.11 What nominal interest rate per year is equivalent to an effective 16% per year compounded semiannually? 4.17 Depos

Financial Analysis - Time Value

I need you help with the attached problem sets. Week 2 Problem Set Problems Suppose that you observe the following term structure for Treasury securities: Term to Maturity (Year) Interest Rates (%) 1 12.00% 2 11.75 3 11.25 4 10.00 5 9.25 a. Calculate the forward rates for year 1,2,3,4, and 5. b. Use this informati

Calculating Equal Periodic Deposits

You want to have $30,000 in your savings account eight years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the amount pays 5.25 percent interest, what amount must you deposit each year?

Calculate PV, FV and annual amounts of annuity payments

If I borrow 60,000 from the bank at 10% interest over the seven-year life of the loan, what equal annual payments must be made to discharge the loan plus pay the bank its required rate of interest. Annual payments_____. How much of this first payment will be applied to interest? to principal? Also how much of my second payment

Concept of Present Value: Calculate FV, PV, annuity problems

Explain why the concept of present value is so important for corporate finance and is often the very first topic taught in any finance class. 2. Calculate the future value of the following: a. $500 if invested for five years at a 4% interest rate b. $150 if invested for three years at a 9% interest rate c. $9100 if investe

Please help with accounting study questions

1. The accountant's primary function is A) evaluating the financial statements. B) making decisions based on financial data. C) the collection and presentation of financial data. D) planning cash flows. 2. A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs $35,000 and is exp

Calculate FV of deposits, annuities, amortize payments, rate of return, EVA

1- You want to go to grad school 3 years from now, and you can save $5,000 per year, beginning one year from today. You plan to deposit the funds in a mutual fund which you expect to return 9% per year. Under these conditions, how much will you have just after you make the 3rd deposit, 3 years from now? 2- You want to go to g

Annuities

5-1 How long will it take $ 200 to double if it earns the following rates? Compounding occurs once a year. 5-2 Find the present values of these ordinary annuities. Discounting occurs once a year. a. $ 400 per year for 10 years at 10% b. $ 200 per year for 5 years at 5% c. $ 400 per year for 5 years at 0% d. Rework Par

1. In determining the future value of a single amount

Please look over these questions for me and let know which one is wrong and show work. SEE ATTACHMENT 1. In determining the future value of a single amount, one measures A. the future value of periodic payments at a given interest rate. B. the present value of an amount discounted at a given interest rate. C. the futu

Choosing an annuity

You have been offered two annuities for the same price. Annuity 1 pays $50,000 per year at the end of the year for 10 years. Annuity 2 pays $40,000 per year at the end of the year for 20 years. If your cost of capital is 10%, which of these two annuities is a better deal, why?

Future Value of an Investment

You will receive $4,000, three years from now. The discount rate is 10 percent. a. What is the value of your investment two years from now? Multiply $4,000 X .909 (one year's discount rate at 10 percent). b. What is the value of your investment one year from now? Multiply your answer to part a by .909 (one year's discount

General Mills will receive $27,500 a year

1. General Mills will receive $27,500 a year for the next 10 years as a payment for a weapon he invented. If a 12 percent rate is applied, should he be willing to sell out his future rights now for $160,000? 2. Determine the amount of money in a saving account at the end of five years, given an initial deposit of $3, 000 an

7 annuity payments problems

1. As stated in the chapter, annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come in the beginning of each period (termed an annuity due). To find the present value of an annuity due, subtract 1 from n an add 1 to the ta

Carrie Tune, Mr Flint, Cousin Bertha Word Problems: annuity values, PV, FV

1. Carrie Tune will receive $19,500 a year for the next 20 years as a result of the new song she has written. If a 10 percent rate is applied, should she be willing to sell out her future rights now for $160,000? 2. At a growth (interest) rate of 8 percent annually, how long will it take for a sum to double? To triple? Selec

Sunrise Industries - Annuity and perpetuity calculations

Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms Moran, by contract, will retire at the end of exactly 12 yrs. Upon retirement, she is entitled to receive an annual end of year payment of $42,000 for exactly 20 years. If she dies prior to the end

Time Value of Money: Compute Bob's investment fund balance at age 60

Bob invested $2,000 in an investment fund on his 21st birthday. The fund pays 7% interest compounded semiannually. Bob is celebrating his 50th birthday today. Bob decides he wants to retire on his 60th birthday and he wants to withdraw $75,000 per year, the first withdrawal on his 60th birthday and the last withdrawal on his 90t

Financial Accounting assistance

Hello, I need some assistance with the attached questions regarding my financial accounting studies. Create a word document answer sheet and submit a list of your answers, by first showing the formula used to calculate your answers. For example: P3-6. PV = FVn x (PVIF i%,n)

Finance: FV, PV, amortization and annuity problems

How much will $1.00 deposited in a savings account earning a compound annual interest rate of 6 percent be worth at the end of the following number of years? a. 3 b. 5 c. 10 If you require a 9 percent return on your investments, which would be preferred. Why? a. $5,000 today b. $15,000 five years from today c.

Low Risk Portfolio for Sonia: how much money should she accumulate for her goal?

Sonia Gomez, a 45-year-old widow, wishes to accumulate 4250,000 over the next 15 years to supplement the retirement programs that are being funded by the federal government and her employer. She expects to earn an average annual return of about 8% by investing in a low-risk portfolio containing about 20% short -term securities,

Lockbox / Concentration Banking

Richmond Corporation was founded 20 years ago by its president, Daniel Richmond. The company originally began as a mail-order company but has grown rapidly in recent years, in large part due to its Web-site. Because of the wide geographical dispersion of the company's customers, it currently employs a lockbox system with collect