Hmm.149. A man recently won the McDonalds poor faculty benefit lottery for $600,000. The man has the option of receiving alump-sum check for $340,000 or leaving the money in the McDonalds poor faculty benefit fund and receiving an annualyear-end check for $60,000 for each of the next 10 years. The man likes to (and can) earn at least 11% return (theavailable interest rate) on his investments.For your information the following present value factors at 11%Present ValuePresent Value ofof $1an Annuity of $1End of Period100.35218a. What is the present value amount of the lump sum :b. Please show your calculations and identify the present value of the annuity to be considered:c. Which choice financially (the lump sum or the annuity) should (poor) Mr. Stack select and state why this is the bestchoice?5.88923

Time value of money is a financial concept which is used to calculate the value of money in present…

Answered: A man recently won the McDonalds poor…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance. Putting specifics aside, you start to ponder the retirement nest-egg this could help you accumulate over the next 30 years. As a diligent finance student, you do some research and find that the money can be invested into an account paying a fixed 4% rate, compounded quarterly. How much retirement money would be in the account after 30 years? (round to nearest dollar) I need to know what this is a PV or an FV. I think I solved it but not sure if it is correct. I need to see how the answer is done in Exel. I see you had one done but I just need the formula for the correct answer. Here is my answer.=FV(0.04/4,4*30,0,-1000000,0)
Hi, can help me with this?
Please help with a and b
A pleasant gentleman has advised you via email that you are entitled to a $1 million inheritance. Putting specifics aside, you start to ponder the retirement nest-egg this could help you accumulate over the next 30 years. As a diligent finance student you do some research and find that the money can be invested into an account paying a fixed 4% rate, compounded quarterly. How much retirement money would be in the account after 30 years? (round to nearest dollar) Answer in written and excel
After completing your Bachelor of Business (Accounting) degree, suppose you secure a permanent position as an accountant. You drafted a financial plan to retire in 35 years from now andthinking about creating a fund that will allow you to receive $25,000 at the end of each year for 30years after your retirement. The interest rates areexpected to be 2.45% per annum during the 35- year pre-retirement period and 3.15% during retirement. Required: a) To provide the 30-year, $ 25,000-a-year annuity, calculate how much should be in the fund account when you retire in 35 years. b) How much will you need today as a single amount to provide the fund calculated in part (a) if you earn 2.75% per year during the 35-yearpre-retirement period? c) (Using different…
Alex Arnold has just turned 65. He has $100,000 to invest in a retirement annuity. One investment company has offered to pay Alex $10,000 per year for 15 years (payments to begin in one year) in exchange for an immediate $100,000 payment. If Alex accepts the offer from the investment company, what is his expected return on the $100,000 investment (assume a return that is compounded annually)? Present value tables or a financial calculator are required. Select one: a. between 5 and 6 percent b. between 7 and 8 percent c. between 8 and 9 percent d. between 6 and 7 percent
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After completing a long and successful career as senior vice president for a large bank, you arepreparing for retirement. After visiting the human resources office, you have found that you haveseveral retirement options: (1) you can receive an immediate cash payment of $1 million, (2) youcan receive $60,000 per year for life (your remaining life expectancy is 20 years), or (3) you canreceive $50,000 per year for 10 years and then $70,000 per year for life (this option is intended togive you some protection against inflation). You have determined that you can earn 8 percent onyour investments. Which option do you prefer and why?
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Mr. White is planning his retirement. He has decided that he needs to withdraw 600,000 per year from his bank account to supplement his other income from Social Security and a private pension plan. How much money should he plan to have in the bank at the start of his retirement, if the bank pays 10% per year, compounded annually, and if he wants money to last for a 12-year retirement period? Draw cash flow diagram.
ou are committed to buying a $225,000 backhoe for your new construction business. Ifyou believe your mutual fund can achieve a 12% annual rate of return and you want to buy the car in 9years for your 30th birthday, how much must you invest today?

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