Mr. Ng wants to sell his business and connected assets currently valued at P30,000,000.00 today. As he is ageing with no heir, he prefers to instead get a monthly "stipend" for as long as he lives instead of the entire lumpsum upfront. You estimate that the growth of the investment (the business and assets) is at about 6% per annum, and you are assuming that Mr. Ng will live for another 15 years. Given the assumptions, what is the maximum monthly "stipend" you should offer to not lose on this deal?
Mr. Ng wants to sell his business and connected assets currently valued at P30,000,000.00 today. As he is ageing with no heir, he prefers to instead get a monthly "stipend" for as long as he lives instead of the entire lumpsum upfront. You estimate that the growth of the investment (the business and assets) is at about 6% per annum, and you are assuming that Mr. Ng will live for another 15 years. Given the assumptions, what is the maximum monthly "stipend" you should offer to not lose on this deal?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 14E
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