COL 10 3.0% 1.08000 16640 1. 25971 1. 36049 1.- 46933 1.c 8687 1382 093 00 92 2.1 3.13 3.45 3.79 4.17 3.97031 4.59 1.71712 5.559 4.32763 5.054 .14166 6.115 60441 6.727 0881 7.400 2308 10.834 768 17.449- 42 45.2592 BF4013 PRINCIPLES OF BUSINESS FINANCE 1 earning's power of Allison Boone, less any of the earnings she would have personally needed for her normal living requirements. Also, the value that she provided for her family as a wife and mother, quite aside from her earning power, had to be considered. Finally, there was the issue of punitive damages that Wayland Frozen Foods was exposed to as a result of letting an unqualified driver operate its truck. If the case went to court, there was no telling how much a jury might assign to this last factor. The three proposals are listed below. An actuarial table indicated that Allison, age 37 at the time of the accident, had an anticipated life expectancy of 40 more years. Proposal 1 Proposal 2 Proposal 3 Pay the family of Allison Boone $300,000 a year for the next 20 years, and $500,000 a year for the remaining 20 years. Pay the family a lump sum payment of $5 million today. Pay the family of Allison Boone a relatively small amount of $50,000 a year for the next 40 years, but also guarantee them a final payment of $75 million at the end of 40 years. In order to analyse the three proposals from financial stand point, attorney Sloan Whitaker called on a financial expert to do the analysis. You will aid in the process. [Case study is adapted from Block, S. B., Hirt, G. A. & Danielsen, B. R. (2019). Foundations of Financial Management (7th ed.). New York, NY: McGraw-Hill.] Required to: Done Done (5 marks) Summarise the case that leads to the lawsuit between Allison Boone's family, as the plaintiff, and Wayland Frozen Foods, Inc. (17 marks) Determine which of the three proposals is the best option for the plaintiff, assuming a discount rate of 6 percent? (17 marks) Determine which of the three proposals is the best option for the plaintiff, now assuming that a discount rate of 11 percent is used? Elaborate further on the findings in Q1 and Q2 in relation to the concept of "time value of (10 marks) money". Decide if the plaintiff will be more likely to settle out-of-court or go before the jury, if Sloan Whitaker thinks that additional punitive damages are likely to be $4 million in a jury trial. (Hint: No calculation involved, justify your answers using qualitative reasons.) (6 marks) (5 marks) 6. Prepare the report with acceptable usage of grammar, language, style and Turnitin report. SUNWAY COLLEGE