revenue in January 2010 of what? Present value of annuity due PVad = [ $80‚000 x f( n=7‚ i=10%)] x (1+.10) PVad = $80‚000 x 4.868 x 1.10 = $428‚384 2.) On January 1‚ 2010‚ Haley co. issued ten-year bonds with a face amount of $2‚000‚000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. What was the total price of the bonds? Requires both Present value of a single sum and ordinary annuity PVss = $2‚000‚000 x f( n=10‚ i=10%) PVss = $2
Premium Leasing Renting Time
Gibson Insurance Company Synopsis Gibson Company is an insurance company that mainly sells annuities and life insurance. Gibson possesses two subsidiary companies‚ Midwest and Compton‚ which also sell the same products but with different prices and features. Both subsidiaries rely on Gibson provides administrative supports for maintaining. Gibson used to use an objective measure to calculate each policy as the support costs allocation basis. The original method did not reflect the real cost
Premium Patient Psychology Management
interest factor of a perpetuity represents (a) (b) (c) (d) (e) Interest rate in percentage terms Reciprocal of interest rate in percentage terms Reciprocal of interest rate in decimal terms Interest rate in decimal terms None of the above 5. The present value of a perpetuity of one rupee when the interest rate is r percent is: (a) (b) (c) (d) (e) 1/r 1/ r2 1/r0.5 2 r2 None of the above 1 6. The present value of an annuity due is equal to the present value of a regular annuity multiplied by : (a)
Premium Net present value Investment Stock
Week 5 Individual Textbook Assignment Chapter 12 ACC-460 January 23‚ 2012 Week 5 Individual Textbook Assignment Chapter 12 1. Provide examples of resources that are temporarily restricted as to: (a) purpose; (b) time; and (c) the occurrence of a specific event. Provide an example of permanently restricted resources. a. Resources that are deemed restricted can be restricted as to a defined purpose by the donor. Such examples for restricted donations can be that it must be used for
Premium Resource Supply and demand Natural resource
In part 1a we are buying a 1 year CD for 10‚000 using 10 percent interest which would give us $11‚000 future value. Then in 1b we bought CDs with 5 percent and 15 percent interest rates and got future values of $10‚500 and $11‚500‚ respectively. But in part 1c we decide to use First National Bank of San Francisco which is all the same except it is compounded semiannually which gives us an effective rate of 10.25% and as well as a future value of $11‚025. In part 1d we would invest in Pacific Trust
Premium Compound interest Future value Money
retirement fund until she is 65. Assume that she can make 7% on her account. How much will she have for retirement at age 65? Your Answer Score Explanation 453412 5.00 Correct. You know how to calculate the FV of an annuity. Total 5.00 / 5.00 Question Explanation FV of an annuity calculation. She should have a minimum of $144‚000. Why? Question 3 (5 points) Mohammad has just turned 21 and now has access to the money his parents have been putting away in an account for him since he was 5
Premium Management Marketing Strategic management
member’s resources (salary‚ travel‚ databases‚ etc.) If you expect to earn a rate of return of 4% annually on the endowment‚ how much will you need to donate to fund the chair? Solution This is a perpetuity of $100‚000 per year. The funding you would need to give is the present value of that perpetuity. From the formula: You would need to donate $2.5 million to endow the chair. Problem Suppose your firm has the following five positive NPV projects to choose from. However‚ there is not enough
Premium Net present value Time value of money
Question 1 Which of the following statements is correct? Answer One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive. If a company has an established clientele of investors who prefer a high dividend payout‚ and if management wants to keep stockholders happy‚ it should not follow the strict residual dividend policy. If a firm follows a strict residual dividend policy‚ then‚ holding all else constant‚ its dividend payout ratio
Premium Bond Dividend Bonds
Comprehensive Exam Review of attempt 1 Started on | Saturday‚ 22 June 2013‚ 12:23 PM | Completed on | Saturday‚ 22 June 2013‚ 01:39 PM | Time taken | 1 hour 15 mins | Raw score | 67/110 (61%) | Grade | 60.91 out of a maximum of 100 | Question 1 Which of the following could initiate the Accelerated Benefits Provision or Rider of a life policy? Choose one answer. | a. A presumptive disability. | | | b. A condition that is terminal. | | | c. Inability to perform some
Premium Life insurance Insurance Term life insurance
PROBLEMS CHAPTER 2 1) If you deposit Rs.100 in the bank today and it earns interest at a rate of 8% compounded annually‚ how much will be in the account 50 years from today? 2) On your birthday‚ your uncle gave you the money in his savings account. His only deposit was Rs.100 made 50 years ago. The savings account paid 8% compounded annually. How much money is in the account today? 3) A loaf of bread costs Rs.0.79 today. If its price increases by 6% per year‚ how much will an
Premium Time value of money Money Time