Suppose you have just graduated from college and are deciding on a career. Two career options, along with your expected salary in each of three earning periods, are displayed in the table below. Assume that anycareer will last only three periods before retirement.OccupationPediatricianTeacherPeriod 0 Period 1 Period 24520245Calculate the net present value (NPV) of your lifetime eamings should you choose to pursue a career in pediatrics if your discount factor 8 = 0.7Please round your answer to 1 decimal place

NPV represents the present value of expected future cash inflows and serves as a tool for…

Answered: Suppose you have just graduated from…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Your aunt offers you a choice of $21,200 in 20 years or $670 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 19 percent, what is the present value of the $21,200? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? O $21,200 in 20 years O $670 today Prav 3 of 10 Next
solving which of the following problems to illustrate discounting? select all that apply.How much do you need to invest today at 7% interest to have $40,000 available for college expenses in 17 years? Please answer fast I give you upvote.
Norm and Tanya earn about the same salary and are undertaking a life insurance needs analysis for one of them passing away. If the nominal projected investment return is an average of 8% per annum, inflation is projected at 3% per annum, then find the amount of additional insurance they should purchase, given the following data: Number of years insurance money should last 30 Net Worth $33,257 CPP Survivor Benefit $400 per month Salary $45,000 Lifestyle Expenses (after mortgage) will continue at full amount $5,000 per month Additional funds for emergency, vacation & taxes $35,000 Funeral expenses $20,000 Current group insurance coverage from employer 1 x Salary Enter your answer rounded to 2 decimal places, and do not enter any symbols such as $, % or commas.
Kranscript You need a loan of $150,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices Choice 1: 20-year fixed rate at 4% with closing costs of $1300 and no points. Choice 2: 20-year fixed rate at 3.5% with closing costs of $1300 and 3 points. What is the monthly payment for choice 1? (Do not round until the final answer. Then round to the nearest cent as needed.) What is the monthly payment for choice 27 (Do not round until the final answer. Then round to the nearest cent as needed.) What is the total closing cost for choice 17 What is the total closing cost for choice 27 CITT
Please correct answer and don't use hand rating
You have researched your dream around-the-world vacation and determined that the total cost of the vacation will be $21,000. You feel you can earn an APR of 9.6 percent compounded monthly and plan to save $215 per month until you reach your goal. How many years will it be until you reach your goal and enjoy your well-deserved vacation? Multiple Choice 6.04 years 8.14 years 6.90 years 6.30 years 5.57 years
Value of a retirement annuity. Personal Finance Problem An insurance agent is trying to sell you an annuity, that will provide you with $ 14,000 at the end of each year for the next 15 years. If you don't purchase this annuity, you can invest your money and earn a return of 8%. What is the present value of the annuity?
A consumer’s demand for a medical service is Q=100−PP where PP is the out-of-pocket price she actually faces. She is considering four different insurance options: uninsurance, full insurance, a 50% coinsurance plan, and a copayment plan with a $25 copay. a. Assume this service has a list price of PL =$70. Calculate Q under each insurance plan.b. Calculate the amount of social loss under each insurance plan.c. Derive a general expression for social loss as a function of x and PL, where x is the copay amount under a copayment plan. For simplicity’s sake, assume x<PL.d. Derive a general expression for social loss as a function of y and PL, where y is the coinsurance rate.
(Click on the into a spreadsheet.) Annuity B C Premium paid today $24.098.32 $22,274.30 $31,240.13 $30,150.95 Annual benefit $3,200 $4100 $4,000 $4,200 Life (years) 20 10 15
None
In this exercise, we consider the effects of starting early or late to save for retirement. Assume that the account considered has an APR of 7.2% compounded monthly. Against expert advice, you begin your retirement program at age 40. You plan to retire at age 60. What monthly contributions do you need to make to reach a nest egg of $137,799.63 at retirement? (round to your nearest cent)
Suppose an investor, Erik, is offered the investment opportunities described in the table below. Each investment costs $1,000 today and provides a payoff, also described below, one year from now. Option Payoff One Year from Now 1 100% chance of receiving $1,100 2 50% chance of receiving $1,000; 50% chance of receiving $1,200 3 50% chance of receiving $200; 50% chance of receiving $2,000 If Erik is risk averse, which investment will he prefer? The investor will choose option 1. The investor will choose option 2. The investor will choose option 3. The investor will be indifferent toward these options. Which kind of stock is most affected by changes in risk aversion? High-beta stocks Low-beta stocks All stocks are affected the same, regardless of beta. Medium-beta stocks

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