Suppose that you earn $50,000 annually. You expect expenses to drop by 22% for your family in the eventof your death. Currently, if you die, you want to provide for your family for at least 15 more years, and theapplicable after-tax and inflation return assumed is 5%. Using the earnings multiple approach provided inyour textbook, what would be the amount of life insurance that you should purchase?
Q: Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$…
A:
Q: None
A: In 2a, we calculated the effective interest rate per year for a payday loan of $850, which required…
Q: None
A: The Internal Rate of Return (IRR) is a metric used to estimate the profitability of a potential…
Q: •An insurance company offers to pay you $1,000 per year for 10 years if you will pay $6,710 up…
A: We can solve this using Present value of annuity formulaPresent value of annuity is =…
Q: What is Nikki T's ROE for next year? Note: Do not round intermediate calculations and round your…
A: The return on equity is an indicator of a company's ability to generate profits for its owners. It…
Q: None
A: The optimal debt ratio is the one that minimizes the WACC. From the calculated values, it's…
Q: Find the price of an American call option on a futures if the current spot price is 30, the exercise…
A: Given Data: ParticularsValueCurrent Spot price 30Exercise Price 25Future price33.7Risk free…
Q: swered Answer EXHIBIT 13-1 Defined Benefit Plans Minimum Vesting Schedules* Full Years of Service…
A: The objective of the question is to calculate the annual benefit that Hadley would be entitled to…
Q: Rajesh would like to buy his first car and the one he has his eye on is $25,000, plus an extra 13%…
A: The periodic payments will be the installment payments paid by the borrower on the mortgage amount…
Q: Universal Suppliers had sales of $475,000 in the month of June. Use the retail method to estimate…
A: Continuing with Elijah Lashley's 2020 Tax ReturnWe've incorporated the details about rent and…
Q: 34.A loan for a new car costs the borrower .8% per month. What is the EAR? 10.03%…
A: Question 2:Expected rate of return on portfolio = 70% * 15% + 30% * 5%= 10.50% + 1.50%= 12% Variance…
Q: None
A: To build the amortization table, we'll start by calculating the monthly payment using the loan…
Q: Assume that the Pure Expectation Theory determines interest rates in the markets. Today's market…
A: The objective of the question is to find the implied interest rate for a 1-year investment starting…
Q: Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt…
A: Step 1:
Q: None
A: Here's a detailed calculation for better understanding. The question is asking us to determine the…
Q: Kara, Incorporated, imposes a payback cutoff of three years for its international investment…
A: The above answer can be explained as under -The payback period is calculated after calculating…
Q: Projects S and L, whose cash flows are shown below, are mutually exclusive and equally risky. Hooper…
A:
Q: K Two accounts each begin with a deposit of $6000. Both accounts have rates of 4.6%, but one account…
A: The objective of the question is to calculate the balance and interest earned in two accounts with…
Q: Year Cash Flow (A) Cash Flow (D) $- -$ 0 348,000 51,000 1234 47,000 24,200 67,000 22,200 19,700…
A:
Q: please give me the corret answer Which of the following is not a type of managed investment…
A: The objective of the question is to identify which among the given options is not a type of managed…
Q: You have been given $10,000 to invest in the stock market starting NLT 21 or 22 February, according…
A:
Q: None
A: Maximum GainThe maximum gain for a long put option occurs when the underlying stock price falls to…
Q: Use the lower-of-cost-or-market rule to determine the value (in $) of the following inventory for…
A: Compare the cost and market value of each item and choose the lower value for each. Raincoats Total…
Q: You observe the following prices of Treasury securities per $100 of par value: • a 6-month T-bill…
A: Spot rate:The spot rate refers to the current exchange rate for the immediate delivery of a…
Q: You've collected the following information from your favorite financial website. 52-Week Price Hi Lo…
A: Dividend Yield is a financial ratio which considers Dividend payments primarily to determine the…
Q: Ordinary shares, par value $55 per share, 200,000 shares authorized, 80,000 shares issued •…
A: Shareholders EquityThe purpose of preparing the shareholders' equity is to know the net balance…
Q: A stock has not been fluctuating much in price. Its average price is $20/share. You expect that the…
A: The straddle strategy refers to the simultaneous purchase or sale of the call and the put options on…
Q: Please show how to solve this problem. Interest-only mortgage with monthly payments and loan amount:…
A: Calculate the monthly payment for the interest-only mortgage: Monthly Payment = Loan Amount × Annual…
Q: DATE stock 3/01/11 Henry 4/01/11 5/01/11 6/01/11 7/01/11 10/01/11 11/01/11 12/01/11 13/01/11…
A: Given Data:…
Q: You have the following two mortgage choices listed on the table. Calculate APR for each mortgage…
A: Let's calculate the Annual Percentage Rate (APR) for each mortgage choice based on the details…
Q: Bank of America has two loans. Each is due to be repaid one per hence and has independent and…
A: A company's credit risk profile can be strenthened by credit enhancement, it is usually to get…
Q: 4 t of An investment earned the following returns for the years 2013 through 2016:20 %, -5%, 30%,…
A:
Q: Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset…
A: Net Present Value (NPV) is a financial measure utilized to assess the profitability of an investment…
Q: Current Attempt in Progress Michael and Barbara Garfield invested $5,300 in a savings account paying…
A: Solution:-When some amount is invested somewhere, it earns interest on it.The amount initially…
Q: Suppose we are thinking about replacing an old computer with a new one. The old one cost us…
A: Step 1:
Q: File Home Insert Page Layout Formulas Data Review View Automate Help Analytic Solver Comments Share…
A: TABLE: Annual ContributionInterest RateFuture Value (30 years) $2,0003.0%$99,951.76…
Q: Due to a lack of information, a trader is not able to retrieve the yield of government bonds as the…
A: The call option price or the value of call option is affected by various factors such as strike…
Q: Problem 13-23 Portfolio Returns and Deviations [LO2] Consider the following information about three…
A: Step 1:A portfolio is the collection of financial securities like shares, bonds etc. Mean return is…
Q: Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of…
A: Step 1: Final answer: a. The IPO price per share will be $15.50.b. You will own 31.3% of the firm…
Q: None
A: In order to solve for the missing amounts, we will be needing for the following formulas: Net…
Q: Based on the table below, the full price that Bond G will settle at on 16 June 2016 is closest to:…
A: PVFlat = PVFull - Accrued Interest PVFlat refers to the present value of a bond without accounting…
Q: Vince plans to open a self - serve grooming center in a storefront. The grooming equipment will cost…
A:
Q: None
A: Step 1: Step 2: Step 3: Step 4:
Q: Am. 112.
A: Here's how to calculate the NPV of the new plant for Retlaw Corporation (RC):1. Calculate the…
Q: A project has the following cash flows: Year Cash Flows 0 -$ 11,100 1 4,750 8 234 4 6,820 4,320…
A: To calculate the Modified Internal Rate of Return (MIRR) using the discounting approach, we first…
Q: None
A: 1. Average Payable Period (APP) Calculation: Payables = $70 million Cost of Goods Sold (COGS) =…
Q: None
A: New Company expected return E(R new) = 15%New Company beta (b new) = 1.1Risk-free rate (Rf) is not…
Q: A firm just paid a dividend of $3.15. The company dividends are predicted to rise by 4.50% per year…
A: Given information: Current Dividend (D0) = $3.15 Constant growth rate (g) = 4.50% or 0.045 Required…
Q: am. 124.
A: Step 1: The calculation of the portfolio's expected return and portfolio beta ABCDEF1% in Asset W…
Q: None
A: 1. Rate of growth in dividends (g) = Return on equity * Retention rate.g = 32% * 23% = 7.36%. 2.…
Step by step
Solved in 2 steps
- If the Alfa Life Insurance Co. will pay you and your heirs $1 at the beginning of each year forever, how much will you pay for the policy assuming the required return on this investment is 1 percent?Your uncle named you beneficiary of his life insurance policy. The insurance companygives you a choice of $100,000 today or a 12-year annuity of $12,000 at the endof each year. What rate of return is the insurance company offering? (6.11%)Using the "Human Life Value" method, how much life insurance should you purchase if you have 45 years until retirement, an annual income of $65,100 received at the start of each years, and a time value of money of 9%? (Assume 80% income replacement, ignore taxes and inflation.)
- You plan to make your first $6,470 contribution to your individual retirement account in 2 years. Assuming you earn a 7.02 percent rate of return and make no additional contributions, what will your account be worth (in $) when you retire 50 years from now?You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $50,000 today or receive payments of $641 a month for 10 years. You can earn 6.50% on your money. What option should you take and why?
- Suppose a man retires at age 65, and in addition to Social Security, he needs $2200 per month in income. Based on an expected lifetime of 204 more months, how much would he have to invest in a life income annuity earning 4% APR to pay that much per year? (Round your answer to two decimal places.)A policyholder wishes to annuitize the cash value of her insurance policy at retirement. She desires an annual payment of $97.8,000 per year and the cash value is expected to be $1.5 million at retirement. Approximately how many payments can she expect to receive if annuity interest rates are 5.739 percent? (Do not round intermediate calculations. Round your answer to a whole number.)You desire an annual retirement income of $200,000 in your Defined-Contribution plan. You expect to live for 30 years past retirement. If you could earn a 3 percent return on your investment, how much accumulated savings and investments would you need? Retirement Account: Round to the nearest cent. DO NOT INOLI INCLUDE Submit COMMAS OR $.
- As the beneficiary of a life insurance policy, you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. If you can earn 6 % annual rate on your money, which option should you take and why? Group of answer choices You should accept the payments because they are worth $336,000 to you today. You should accept the payments because they are worth $247,800 to you today. You should accept the $200,000 because the payments are only worth $189,311 to you today. You should accept the payments because they are worth $209,414 to you today. You should accept the $200,000 because the payments are only worth $195,413 to you today.After the birth of your first child, you decide to buy a life insurance policy for yourself but can't decide how much to buy. In the event of your untimely death, you estimate that the life insurance money can be invested in an account earning 8% interest compounded monthly. You would like your child to get a monthly payment of $1,500.00 for 18 years.How much should your life insurance policy be worth in order to achieve your goal? I should get a life insurance policy that is worth $_______You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent. Required: How much would you need to have saved in your retirement fund to achieve this goal? a) Assume that the perpetuity payments start on the day of your retirement. b) Assume that the perpetuity payments start one year from the date of your retirement.