FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are at retirement age and one of your benefit options is to accept a monthly annuity of $5,900 for 20 years. What lump sum

You are at retirement age and one of your benefit options is to accept a monthly annuity of $5,900 for 20 years. What lump sum settlement, if paid today, would have the same present value as the $5,900 monthly annuity? Assume a 4.5 percent discount rate.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials of Managerial Finance

Essentials of Managerial Finance

Authors: Scott Besley, Eugene F. Brigham

14th edition

324422709, 324422702, 978-0324422702

More Books

Students also viewed these Finance questions

Question

★★★★★
Super Saver Groceries purchased store equipment for $ 29,500. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $ 3,500. During the 10-year period, the...

Answered: 1 week ago

Question

★★★★★
=+8. Pincer plc is hoping to increase sales by granting its customers longer payment periods. Its annual sales currently stand at 1m and it gives its customers an average of 30 days to pay. The...

Answered: 1 week ago

Question

★★★★★
Under what circumstances would you expect parent training versus direct clinical intervention to be more successful in reducing a childs behavior problems?

Answered: 1 week ago

Question

★★★★★
The following information relates to Armanda Co. for the year 2017. Instructions After analyzing the data, prepare an income statement and an owners equity statement for the year ending December...

Answered: 1 week ago

Question

★★★★★
The Can Division of Marigold Corp. manufactures and sells recyclable containers externally for $0.54 per container. Its unit variable costs and unit fixed costs are $0.24 and $0.16, respectively. The...

Answered: 1 week ago

Question

★★★★★
Tynezia Oil Company obtained the rights to shoot 25.000 acres at a cost of $0.20/acre on June 10, 2018. Tynezia contracted and paid $80,000 for a reconnaissance survey during 2017. As a result of...

Answered: 1 week ago

Question

★★★★★
Describe in detail the three main assumptions for parametric testing.

Answered: 1 week ago

Question

★★★★★
Which information is required to calculate the Total Amount of Insurance Needed in the Financial Needs Analysis (FNA) section? i. Death Amount, Passive Income, Mortgage Balance ii. Mortgage Balance,...

Answered: 1 week ago

Question

★★★★★
An electronic store sells particular model of a laptop computer. There are only six laptops in stock, and the manager wonders what daily demand for this particular model will be. She learns from the...

Answered: 1 week ago

Question

★★★★★
Suppose that, in each period, the cost of a security either goes up by a factor of u = 2 or down by a factor d = 1/2. Assume the initial price of the security is $100 and that the interest rate r is...

Answered: 1 week ago

Question

★★★★★
Sarik was surprised by how many conversations it took to make a deal with CorpCo. What pitfall did Sarik experience?

Answered: 1 week ago

Question

★★★★★
1) Puma Company owns 80% of the common stock of Smarte Company. Puma sells merchandise to Smarte at 20% above cost. During 2017 and 2018, intercompany sales amounted to $1,080,000 and $1,200,000...

Answered: 1 week ago

Question

★★★★★
Daly quotes the president of the Wo~d Bank as saying, "Globalization is a practical methodology f0 Answered: 1 week ago

Answered: 1 week ago

Question

★★★★★
What would be the likely results of letling universities bid financially for college athletes? Would allowing college players to negotiate the best contract they can be good or bad for college...

Answered: 1 week ago

Question

★★★★★
Are there positive aspects of globalization that Daly has overlooked? What about negative aspects of lntemationalizatiOfl? Which do you taVQr-intemationalization or globalization?

Answered: 1 week ago

Previous Question Next Question