Price = $185‚000 Inflation annual rate o increase= 6% Duration= 20 years Using Table A-1 FV of 185‚000 after inflation =185000*(3.207)= $593‚295 Duration= 20 years Annual rate of return= 10% Annuity Ordinary=?? Using Table A-3 Annuity ordinary= 593‚295/57.274= 10‚358.88 to be paid at every year end 2. Deposits to create a perpetuity You have decided to endow your favorite university with a scholarship. It is expected
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years. Should management accept this investment proposal? Solution By Present value factor for an annuity of $1 1.Determine a present value factor for an annuity of $1 using the following formula: Present value factor for an annuity of $1 = Amount to be invested / Equal annual cash inflows 2. Locate the present value factor (determined in step 1) in the present value of an annuity of $1 table. First locate the number of years of expected useful life of the investment and then proceed
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C/(r − g) = 10‚000/(.10-.05) = $200‚000. Est time: 06-10 9. a. PV = 600‚000/(1.055) = `470‚115.7 (assuming the cost of the car does not appreciate over those five years). b. The six-year annuity factor [(1/0.08) – 1/(0.08 x (1+.08)6)] = 4.623. You need to set aside (600‚000 × six-year annuity factor) = 600‚000 × 4.623 = `2‚773‚727.8. c. At the end of six years you would have 1.086 × (3‚000‚000 – 2‚773‚727.8) = `359‚065.55. Est time: 06-10 10. a. FV = 1‚000e.12 x 5 = 1‚000e.6 = `1
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Salary = $60‚000‚ tax rate = 26%‚ because of tax rate‚ c = $44‚400 R (discount rate) = 6.5% G (growth rate) = 3% T (the number of period working) = 40 So : Present Value (PV) of Growing Annuity. PVW = C ((1 – ( (1+g)/(1+r))t)/ r – g ) PVW= $44 400 ((1 – ((1+3%)/(1+6.5%))40)/ 6.5% - 3%) PVW = $44 400 ((1 – (1.03/1.065)40)/ 0.035) PVW = $ 44 400 ((1 – 0.2627) / 0.035) PVW = $44 400 (0.7373 / 0.035) PVW = $44 400 (21.066) PVW = $ 935
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Week Five Team Reflection ACC 421 2014 Team B Week Five Reflection This week learning team “B” has discussed the concept of time value of money. One will be able to understand the importance of time value of money‚ the different ways to compute interest‚ information about present value and future value‚ and the how time value relates to accounting. Importance of Time Value of Money Time value of money deals with the relationship between money and time (Kieso‚ Weygandt
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| ASC 172 PRINCIPLE OF RISK MANAGEMENT AND INSURANCE NURUL SYAFIQAH SHAHRIM 2012216192 CHAPTER 1 : RISK AND ITS TREATMENT DIFFERENT DEFINITIONS 1) RISK - uncertain in future - eg : risk of being killed in an auto accident‚ risk of lung cancer for smokers 2) LOSS EXPOSURE - situation in which loss is possible to occur - eg : building may be damaged by earthquake 3) OBJECTIVE RISK - relative variation of actual loss from expected loss
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Problem Set 1 Solutions 1. Calculating Taxes. The Herrera Co. had $246‚000 in taxable income. Using the rates from Table 2.3 in the chapter calculate the company’s income taxes. What is the average tax rate? What is the marginal tax rate? The total amount of income tax is 0.15($50‚000 = $7‚500 + 0.25(($75‚000 – 50‚000) = $6‚250 + 0.34(($100‚000 – 75‚000) = $8‚500 + 0.39(($246‚000 – 100‚000) = $56‚940 Total = $79‚190 The average tax rate is the total amount of tax
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acknowledgEment At the outset I would like to take this opportunity to thanks Mr. S. N. Mahapatra‚ Assistant Vice President and Mr. Sri Nath Yadav‚ Deputy Area Manager ‚ Bajaj Allianz for making me realize new dimensions which earlier seemed beyond the scope of vision for me by allowing me to carry out my summer training at this rapidly progressing company. I also thank Mr. Santosh kumar Srivastava Sr. Sales Manager‚ Bajaj Allianz for helping me to carry out the project successfully through
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ALL STAR FINANCIAL PLANNING ALL STAR FINANCIAL PLANNING Personal Financial Plan for John & Mary Henderson Table of Contents Table of Contents Introduction……………………………………………………………………….……….3 Net Worth………………………………………………………………….………………4 Cash Flow………………………………………………………………………….………5 Financial Goals…………………………………………………………………….………6 Cash Flow Planning…………….…………………………………………………………7 Investment Vehicles………………………………………………………………...……..8 Current Investment Allocation………………………………………………………….10
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10 years. If interest is being paid at 8%‚ how much will you have in 10 years? [$203391.33] 5. You are getting payments of $8000 at the beginning of every year and they are to last another five years. At 6%‚ what is the value of this annuity? [35720.84] 6. How much would you have to deposit today to have $10‚000 in five years at 6% interest compounded semiannually? [$7440.94] 7. Construct an amortization schedule for a 3-year loan of $20‚000 if interest is
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