An engineering firm estimates that its cost for employer sponsored health insurance will be $750,000 next year and increase at 9% per year for the next 5 years. The company CFO wants to budget a uniform amount each year to cover these costs. If the firm's rate of return is 6% per year, how much should be invested each year for employer sponsored health care? Express your answer in $ to the nearest $1,000.
Q: Q1-1 Prepare a Balance Sheet Prepare a balance sheet for the NMB company as of December 2020, based…
A: A balance sheet and an income statement are both important financial statements that provide…
Q: Entry for Cash Sales; Cash Short The actual cash received from the day's cash sales was $27,180, and…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. Cash is one…
Q: Your company purchases a new building for $500,000. The upkeep and maintenance of the building ends…
A: Initial cost is $500,000. The annual cost is $10,000. The period is 20 years. The interest rate is…
Q: During the past month, Jennifer Johnson had income of $3,500. During the month, her net worth…
A: Income Income is the money a person or organization receives in return for labor, the creation of a…
Q: Find the present value of the ordinary annuity. Payments of $430 made annually for 13 years at 6%…
A: The time value of money (TVM) is an important concept in finance that reflects the idea that money…
Q: What sum of money due on October 1, 2026 is equivalent to $3000 due on January 1, 2003 if interest…
A: Data given: 1. i=1.2%/ year compounded monthly for 7 years =(1+1.2%/12)^(7*12) 2. i=6.8% / year…
Q: plain in detail how a five year plain vanilla interest rate swap with a notional value of $1,000,000…
A: In this question we will be explaining the 5 Years Vanilla Interest Payment SWAP with a notional…
Q: I'm questioning how you calculated supplier 1. Wouldn't it be $32,000 + the PV of $40,000 ($5 *…
A: The concept of time value of money will be used here. We need to determine the present value in this…
Q: Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are…
A: STEP 1 MORTGAGE When you and a lender enter into a mortgage, the lender is granted the power to…
Q: lender engages in a 15-day $1,000,000 reverse repo at a rate of 2.50%. The haircut is 2%. The…
A: In a reverse repo, the borrower will have to will give the collateral to lender and the lender will…
Q: If the accumulated value of an investment that is growing at 4.61% compounded semi- annually is…
A: A sum of money put into the multiple avenues available in the market for wealth creation or earning…
Q: 7. If the sum of P 12,000 is deposited in an account earning interest rate of 9% compounded…
A: Please note all 7 questions cannot be answered under Answering Guidelines. The solution for first 3…
Q: A fund is to be created which pays out a scholarship of £7,000 every year in perpetuity. The first…
A: Perpetuity are funds that are paid over the whole life period of annuities. Value of perpetuity is…
Q: Mortgage Details Principal Loan Length Interest Rate Monthly Payment $150,000 30 years 4% $716 After…
A: A mortgage is a sort of loan used to buy or keep up a home, a piece of land, or other real estate.…
Q: Assume that the real, risk-free rate is expected to be constant at 2.1%, that the inflation rate is…
A: Data given: Inflation rate is expected to be 3% year for the next three years Thereafter, inflation…
Q: 1. For the year ending 2022 calculate the Operating Cash flow using the following equation Earning…
A: Cash flows statement is one of the financial statement of the business, which shows all cash inflows…
Q: Anita is considering the purchase of a five year annuity of 10 semiannual payments of $6,000 made at…
A: Annuity refers to the fixed amount to be received by the insurer for the rest of the life against…
Q: an borrows Php 5000 with the agreement to pay the principal and all accumulated simple interest at…
A: In simple interest there is no interest on interest and interest on principal loan amount only so it…
Q: The modified duration of a bond portfolio worth $4,400,000 is 4.50 years. By approximately how much…
A: The collection of financial assets that make up an investor's investment portfolio may include…
Q: a) First, ignore the fact that rrf depends on whether you are long or short the risk-free asset.…
A: Note: This post contains several questions. There are no specific directions regarding the question…
Q: 3. Let Y be the present value variable of for a 20-year temporary life annuity due of $1 per year…
A: The sum of payments under an annuity refers to the total amount of payments made over a specified…
Q: You determined that the returns from Grain Processing Inc (GPI) are normally distributed with a mean…
A: Expected return is a measure of probability used to determine the likelihood that an investment will…
Q: Consider a one-period model with = {1,2,3} and two risky assets S₁, S₂ whose with current prices are…
A: Risk-Neutral Probability Measure is a probability measure that is used in mathematical finance to…
Q: Calculate the time period of an investment in a mutual fund that matured to $68,282.52 yielding…
A:
Q: What is the total cost of a 36-month lease with the terms described in the table?
A: Here, Monthly Fee is $450 Deposit is $2,500 Registration and Title is $300 Disposition Fee is $350…
Q: The balance in the saving account increased by 1.5% in one year to $20,150. How much was in the…
A: We will calculate Present Value : PV = FV1+rn where, PV = Present Value FV = Future Value r =…
Q: What are the differences in the function of the two units under the supervision of a chief finance…
A: A Chief Financial Officer (CFO) is the top financial executive in a company responsible for…
Q: Uneven Cash Flow Stream Find the present values of the following cash flow streams. The…
A: The concept of money's time worth indicates that any sum of money is worth more currently than what…
Q: You are going to receive three perpetuities. Perpetuity 1 will pay $450 each year, with the first…
A: A perpetuity is a cash flow or an annuity that goes on forever. To solve this question we need to…
Q: Find the proceeds of the following promissory note. A nine-year, $2600 00 note bearing interest at…
A: Notes are issued at some specified interest and they are paid on the maturity with interest…
Q: You volunteer on a local fire department and are asked to help in the purchase of a new fire engine.…
A: effective annual percentage rate (APR) if you select this loan is (1+ i/n)^n-1 Where i=Nominal…
Q: All other things being equal, the numerical difference between a present and a future value…
A: The infusion of money into multiple alternatives available indicates an investment. An investor…
Q: Yang is considering buying an asset that, starting 5 years from now, will pay $10,000 per year…
A: To solve for this question we need to use time value of money concept. Time value of money states…
Q: HOW TO FIND THIS: If the 2-year US Treasury yield is 3.5% and the 5-year yield is 2.5%, what is the…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: The appropriate discount rate for the following cash flows is 12 percent compounded quarterly. �What…
A: The present value is the discount value series of cash flow from year 1 to 4 , all cash flow…
Q: A fund starts the year with NAV 46 per share. Over the year, the fund pays out income of 2.5 per…
A: For a given scheme, a mutual fund's success is gauged by its net asset value (NAV). It is the market…
Q: Assume that the Liquidity Preference Theory of the term structure is correct and that you expect the…
A: 10 year corporate bond rate r10 = 9.80% Real risk free rate r* = 1.50% Liquidity premium LP10 =…
Q: Twins graduate from college together and start their careers. Twin 1 invests $2000 at the end of…
A: First calculate for twin 1, the value of an investment at 65. The FV twin 1 invested at 31 years =…
Q: Describe the S&P 500. W
A: S&P 500 is an index and it stands for the "Standard & Poor's 500" index. It is an index that…
Q: Problem 12-11 Finding the WACC You are given the following information for Tara Ita Power Co. Assume…
A: Capital structure refers mix of long-term debt, equity, and other securities that a company uses to…
Q: Smith and T Co. is expected to generate a free cash flow (FCF) of $7,810.00 million this year (FCF₁…
A: Intrinsic value Based on the cash flows from an investment, intrinsic value calculates its worth. In…
Q: Question 4 a) Mike is a speculator and has the following information with regard to the financial…
A: Covered interest arbitrage Covered interest rate arbitrage uses future or forward rates to calculate…
Q: Q) Tanya sells mutual funds for Pacific Financial Services Ltd. On mutual fund sales, Pacific…
A: In a mutual fund, investors pool their funds to invest in securities such as stocks, bonds, and…
Q: 26. The cash flow associated with making self-locking fasteners is shown below. Determine the net…
A: Net present value is the method of capital budgeting. Investors use this method to evaluate their…
Q: Hamilton, Inc. bonds have a coupon rate of 11 percent. The interest is paid semiannually, and the…
A: Value of a bond or price of a bond is the present value of all future cash flows associated with the…
Q: Required: 3. Net present value (NPV). (Future Value of $1. Present Value of $1. Future Value Annuity…
A: Please note that the answer might slightly vary as the factor tables are not provided in the…
Q: Modigliani and Miller's Method - discuss briefly
A: Modigliani-Miller Theorem: It represents one of the most significant theorems in the field of…
Q: Can you explain more on the present value annuity factor (PVAF)@9%for30years here is the problem:…
A: When considering a specific rate of return, an annuity's present value represents the current value…
Q: Which of the following statements is correct? O A. Investors appreciate illiquid assets in their…
A: Liquid and Illiquid Assets: Any asset that can be converted to cash at short notice, and without…
Q: The dividend for PQR Inc., is currently $1.72 per share. It is expected to grow at 20 percent next…
A: Dividend discounting model is a model for finding out the value of share on the basis of future…
Equivalent Annual Cost:
- It represents the annual cost of operating, owning, and the maintenance of an asset over its useful life.
- It is primarily used in the areas of capital budgeting by the firm to allow for a comparison of cost-effectiveness.
Step by step
Solved in 3 steps with 2 images
- Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.An engineering firm estimates that its cost for employer sponsored health insurance will be $750,000 next year and increase at 11% per year for the next 5 years. The company CFO wants to budget a uniform amount each year to cover these costs. If the firm's rate of return is 6% per year, how much should be invested each year for employer sponsored health care? Express your answer in $ to the nearest $1,000.A company invests ina fitness facility for its employees that costs $2,000,000. Due to the improved health of its employees, the company saves $500,000 per year on its healthcare premiums after the fitness facility is completed. What is the discounted payback period of the fitness facility, assuming a MARR of 4%? Click here to access the TVM Factor Table calculator. years
- Hello can you please walk me through how to do this the annual income is 20,000 It is wise to set aside 7.5% of gross monthly income for 401 k investment. Assume the investment earns a 5% annual return and use Excel to determine the balance after 40 years for the unskilled worker and for your expected income. Then use Excel to determine how many years it would take for the unskilled worker and for your expected investment to reach $500,000.Best Properties is considering an investment that will pay $1,000.00 at the end of each year for the next 15 years. It expects to earn an annual return of 16% on its investment. How much should the company pay today for its investment? Type your numeric answer and submitSuppose you have an internship at a chemical factory. Your supervisor asks you to calculate the net present value of an expansion project. Suppose the expansion costs $5 million now and $1 million next year. The plant will produce revenues of $4 million in the second year and $4 million in the third year. Calculate the net present value (or the present value of the benefits less than the present value of the costs) at a 4% discount rate. Enter your answer in millions of dollars with two decimal places.
- Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $55,000 in 30 years. What is the comparable annual salary today, assuming an annual nation rate of 4% (compounded annually)? (Round your answer to the nearest cent.) Need Help? Subme Anwer PasditElijah Enterprises will need to upgrade the computer system in 6 years. They anticipate the upgrade to cost $106,200. If the discount rate is 13%, what will be the required yearly investment needed to obtain the money for the upgrade?Round your (1+R)^n value to 2 decimal places and use that number for your final amount required rounded to the nearest dollar.To save money for a new house, you want to begin contributing money to a brokerage account. Your plan is to make ten contributions to the brokerage account. Each contribution will be for $2,500. The contributions will come at the beginning of each of the next 10 years, i.e., the first contribution will be made today at t = 0 and the final contribution will be made at t = 9. Assume that the brokerage account pays a 9 percent return with semi-annual compounding. How much money do you expect to have in the brokerage account nine years from now (t = 9)?
- Your organization has been asked to invest in a continuing care retirement center. Your investment will be $600,000 per year for the next 5 years. After 5 years, cash flows will be $400,000 per year for the next 15 years. If your discount rate is 10%:(a) what is the present value of the investment?(b) what is the present value of the cash flows?(c) what is the profitability index?You are getting into a business and want to take a loan. The bank requires that you show them your projected profits. Develop calculate a forecast for the next five years starting 2022 the following data: First order is for 100,000 units at a selling price of 6kshs per unit. Both numbers are projected to increase by 20% yearly Renting the production facility at 500,000kshs a year for five years Variable manufacturing cost of 1.50kshs per unit with a projected increase of 10% yearly Administration cost of 25,000kshs per year with a likely increase of 5%annually Tax rate is at 36% Develop a five year financial forecast from 2016 showing profits before and after taxYou can purchase an equipment for $4,000. The equipment will provide benefits worth $900 a year. The expected life of the equipment is 8 years. It is expected that the price of the equipment will decrease by 15% per year. If the discount rate is 12%, would you buy the equipment today or will wait to purchase? When is the best time to purchase it? give excel file solution