An insurance company is offering monthly payments of $ 250 for the next twenty years in exchange for a one- time payment of $40, 000 today. What is the rate of return on this offer? 3.63% Correct Answer 4.36 % 5.21 % 6.39% Incorrect Response 7.50%
Q: A couple buys $8000 worth of furniture and takes advantage of the furniture company's "don't pay a…
A: Monthly payment refers to an amount that is paid every month for the repayment of a loan amount…
Q: Discus in depth what the main functions of a central bank are with practical examples?
A: Central Bank is an institution which supervises, regulates and controls the entire monetary system…
Q: You are considering investing in a start up company. The founder asked you for $210,000 today and…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: f you were given $100, 000 to invest today in a bond with an interest rate of 5%, how muchwould that…
A: Amount available for investment = $100,000Interest rate = 5%Number of years = 20To find: Bond worth…
Q: The one-year spot interest rate is r₁ = 5.4%, and the two-year rate is r2 = 6.4%. If the…
A: Variables in the question:Rate for 2 year=6.4%Rate for 1 year=5.4%Formula to be used:Expected one…
Q: In 2021, Landon has self-employment earnings of $195,000. Required: Compute Landon's self-employment…
A:
Q: What was the existing capital structure for your firm? Do you believe it was optimum? Use Hamada's…
A: The existing capital structure of the firm is made up of 19% debt and 81% equity. This is determined…
Q: Required: A fund manages a $4.8 billion equity portfolio with a beta of 0.60. If the S&P contract…
A: The fund would need to sell futures contracts equivalent to the beta-weighted value of its portfolio…
Q: Assume that a company is considering purchasing a machine for $50,500 that will have a five-year…
A: Profitability Index:Profitability index refers to a financial tool that entails as to whether a…
Q: 23 You short-sell 200 shares of Tuckerton Trading Company, now selling for $56 per share. What is…
A: The maximum gain on the selling happens when the value of the share decays to zero. Therefore in…
Q: Suppose the real risk-free rate of interest is 2%. Inflation is expected to be 2% for 2 years and…
A: The nominal interest rate on a bond is the stated rate of interest that the issuer agrees to pay to…
Q: Acme Investors is considering the purchase of the undeveloped Baker Tract of land. It is currently…
A: Net present value is the value added by the project to the company and project with more value…
Q: Task 2 – New starters – seasonal workers You join a retail organisation which pays employees on a…
A: The objective of the question is to identify the potential issues with the current payroll procedure…
Q: What is the price of a $1,000 par value, semi - annual coupon bond with 18 years to maturity, a…
A: Bond price refers to the price used for buying and selling the bonds in the market among investors…
Q: A 4.4% annual coupon, 24-year bond has a yield to maturity of 4.61%. Assuming the par value is…
A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…
Q: you observe that the current 1 - year treasury bill rate is 4% and estimate that it will be 4.6% in…
A: The minimum interest rate will be the addition of treasury bill rate in one year and liquidity…
Q: Calligraphy Pens is deciding when to replace its old machine. The machine. salvage value is…
A: Old machine:Current salvage value$2,400,000.00Book value$1,475,000.00Maintenance cost of old…
Q: pls fill in blanks
A: These pounds are equivalent to $211,200, which represents a profit of $11,200 over the initial…
Q: A project that provides annual cash flows of $16,900 for eight years costs $75,000 today. What…
A: NPV (Net Present Value) is a crucial tool for evaluating project feasibility and is considered a key…
Q: Hilton Hotels Corporation has a convertible bond issue outstanding. Each bond, with a face value of…
A: Bond valuation is the process of determining the fair value of a bond. It involves assessing the…
Q: DRK, Incorporated, has just sold 140,000 shares in an initial public offering. The underwriter's…
A: Shares sold/issued = N = 140,000Explicit fees = 84,000Offering price = 54 per shareChange in share…
Q: Company Scenario You have just started a new role as payroll manager for one of England’s top…
A: Q1: The soccer club, in all likelihood, would not don't forget outsourcing their payrolls due to…
Q: ● ● Bob Marley Inc issues a $1000 face value zero coupon bond The initial price for the bond is $714…
A: The objective of the question is to find the annual interest rate for a zero coupon bond issued by…
Q: Consider the following table for a period of six years: Year 1225528 3 4 6 Returns Large-Company…
A: Average return is the simple mean of the given set of returns from the stock.Standard deviation is…
Q: Inter Tech Corporation needed financing to build a new manufacturing plant. On June 30th of this…
A: Price of bond is the present value of coupon payments plus present value of the par value of bond.
Q: The creative designer at your company has promised to reduce all design faults by one third over the…
A: This answer is given below.Explanation:
Q: If you borrow $1000.00 on May 1, 2019, at 12% compounded semi-annually, and interest on the loan…
A: The time value of money highlights the idea that money invested now will have a higher value than…
Q: Paul obtained a loan of $37,500 at 4.60 % compounded monthly. How long will it take to settle the…
A: Loans have to be paid off in the form of fixed periodic payments. Here the loans are being paid in…
Q: Suppose that XTel currently is selling at $50 per share. You buy 800 shares using $30, remainder of…
A: Rate of return on investment (ROI) is a financial metric used to evaluate the profitability of an…
Q: What equal payments in 2 years and 4 years would replace payments of $32, 500 and $72, 500 in 7…
A: The concept of time value of money will be used here. As per this concept money has the power to…
Q: ABC Corp is a manufacturing company with the following information: 1. Financial Statements: • Net…
A: The objective of the question is to calculate the intrinsic value per share for ABC Corp using…
Q: The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at…
A: Hence, the question has been solved in detailed explanation manner.Explanation:Solution: a.…
Q: A fast-growing firm recently paid a dividend of $0.70 per share. The dividend is expected to…
A: The stock value of the company can be found by using the constant growth model which was proposed by…
Q: A Company borrowed money from a local bank. The note the company signed requires five annual…
A: Number of installments = 5Annual amount = $16,500Interest rate = 7%To find: The amount borrowed by…
Q: Using the information provided please show all work and formulas in excel ! Suppose that you have…
A: Incremental borrowing cost refers to an expense that is incurred for taking an extra amount of loan…
Q: A $1M investment in 60-day commercial paper has a 3% discount yield. What is the bond equivalent…
A: The Bond's equivalent yield can be referred as the financial metrics that can be used by various…
Q: Premier Corporation has an ROE of 15.6 percent and a payout ratio of 25 percent. What is its…
A: Sustainable Growth Rate (SGR) is the maximum growth rate that a company can sustain without…
Q: What are the Sharpe and Treynor ratios for the fund? Note: Do not round intermediate calculations.…
A: The Sharpe ratio and Treynor ratio are employed in investment analysis to assess how well individual…
Q: Log on to finance.yahoo.com and enter the ticker symbol "LVS" in the Quote Lookup box to find…
A: Return is the total income earned or expected to be earned by an investor on their investments in a…
Q: Bart's Moving Company bonds pay $50 semiannually. The bonds have a par value of $1,000 and mature in…
A: A bond refers to an instrument that provides the issuing organization access to debt capital from…
Q: You have found the following stock quote for RJW Enterprises, Incorporated, in the financial pages…
A: Financial analysis involves examining a company's financial statements to assess its performance and…
Q: An equipment's with 5 years useful life is with initial cost of $1,000,000. After 5 years, the…
A: The objective of the question is to calculate the after-tax residual value of the equipment at the…
Q: Today is February 15, 2008 Issue Date Type Feb Note 2000 Aug Bond 2005 3.66 4.47 3.89 4.15 Price…
A: A bond is a type of borrowing from the public in which the corporations issue the bonds and promise…
Q: You would like your child who was bom today to be a millionaire eventually. To that end, you deposit…
A: Future value refers to the value of cash flow at future date. It can be calculated by compounding…
Q: Bank ADC has £200 million in loans to corporate customers and has £80 million in deposits it owes to…
A: Total Loans = £200 millionTotal Deposits = £80 millionForward Sale = £30 million
Q: The market consensus is that Analog Electronic Corporation has an ROE = 11% and a beta of 1.45 and…
A: Solution:− (a) Required Return (r) = Risk-free Rate + Beta × (Market Return - Risk-free Rate) = 6% +…
Q: You are 20, will retire at 65 with $2,000,000, and earn 8% per year compounded annually. What must…
A: Time = t = 65 - 20 = 45Future Value = fv = $2,000,000Interest rate = r = 8%
Q: Advantages and disadvantages of exchange - traded funds versus mutual funds.
A: Mutual funds refers to a pool of investment. Mutual funds can be of two types: closed ended and…
Q: Given the following information, calculate the effective tax rate expressed in mills: market value…
A: Market value of property = $170,000Assessed value of property = 40% of the market valueExemptions =…
Q: roject A requires an initial outlay at t= 0 of $3,000, and its cash flows are the same in Years 1…
A: The MIRR of a project refers to the measure of the profitability of the project as it considers that…
Step by step
Solved in 3 steps with 2 images
- We Pay Insurance Co. will pay you $1,250 each quarter for 30 years. You want to earn a minimum interest rate of .9'percent per quarter. What is the most you are willing to pay today for these payments?Multiple Choice answersA. $88.008.36B. $86,490.98 C. $91,043.14D. $90,621.63E. $269.992.65If you deposit $2 comma 7002,700 today into an account earning an annual rate of return of 1313 percent, what will your account be worth in 4040 years (assuming no further deposits)? In 5050 years? Question content area bottom Part 1 Click on the table icon to view the FVIF table: LOADING... . In 4040 years, your account will be worth $enter your response here. (Round to the nearest cent.)Ma1. An insurance company advertises that $2,483.76 will purchase a 8 year annuity that pays $200 semi-annually at the end of the period. What quarterly compounded rate of return does the investment earn? Note: Please make sure your final answer(s) are in percentage form and are accurate to 2 decimal places. For example 34.56% Rate of return = 0.00%
- QUESTION ONE A medical insurance company has offered to pay you a medical refund today of K350, 000.00 or to pay K650, 000.00 in three years time. If interest rates in the market were 20% compounded semi annually which of the two options would be worthwhile? If you planning to invest some funds in the following manner; K20,000 at the end year 1,K30,000 at the end of year 2 and K10,000 at the end of year 3.How much would this account have at the end of year 4 assuming the funds earn interest of 12% compounded per annum You have inherited two endowment funds from your grandfather. One fund will pay K30, 000.00 annually indefinitely, while the other fund will pay K12, 000 annually for 20years.The insurance company has offered to buy this fund from you. Calculate the combined market value on such fund if interest were 18% in the market.…ook ences Chris Seals has just given an insurance company $62,525. In return, she will receive an annuity of $7,458 for 12 years. a. At what rate of return must the insurance company invest this $62,525 to make the annual payments? (Use a Financial calculator to arrive at the answers. Round the final answer to 3 decimal places.) Rate of return b. What rate of return is required if the annuity is payable at the beginning of each year? (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.) Rate of returnQuestion Help Acme Annuities recently offered an annuity that pays 4.2% compounded monthly. What equal monthly deposit should be made into this annuity in order to have $70,000 in 10 years? The amount of each deposit should be $. (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer. Clear All Check Answer All parts showing ר
- Finance Find the savings plan balance after 18 months with an APR of 6% and monthly payments of $800. Assume an ordinary annuity. a. $15,028.63 c. $15,360.28 b. $15,280.36 d. $15,306.82 Please select the best answer from the choices provided A B C Dpls answer and show cash flow diagram I will invest $500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have achoice of making that payment of $500 at the beginning or the end of the quarter (regular annuity orannuity due). In which account will I have more money and by how much? Which account will earn themost interest and by how much? Ans: Regular Annuity‐ $249981.20, Interest = $185981.20; Annuity Due‐ $254543.36, Interest =$190543.36You make a payment of of $ 24 with Apr of 5.2 % After 90 years what will you have in the account n=12 The account has 0 value PMT = 24 Apr = 0.052 Y = 90 n = 12
- Find the future value of this loan: $20,862 at 11.4% for 14 months. Group of answer choices A. $23636.65 B. $25657.00 C. $263536.51 D. $40,000.00Give typing answer with explanation and conclusion Find the interest rate (or rates of return) in each of the following situations. Do not round intermediate calculations. Round your answers to the nearest whole number. You borrow $740 and promise to pay back $814 at the end of 1 year. % You lend $740 and receive a promise to be paid $814 at the end of 1 year. % You borrow $60,000 and promise to pay back $171,156 at the end of 8 years. % You borrow $11,000 and promise to make payments of $3,359.50 at the end of each of the next 5 years. %Your insurance agent is trying to sell you an annuity that costs $80,000 today. By buying this annuity, your agent promises that you will receive payments of $445 per month for 30 years. What is the rate of return expressed as an APR on this investment? Multiple Choice O 4.91% 5.32% 4.43% 5.23%
