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?
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- 1.A person buys a piece of lot P300,000 downpayment and 8 deferred quarterly payments of P8,000 each, starting 3 years from now . What is the present value of the investment if the rate is 12% compounded quarterly? 2. Mr Dela Cruz is left with an inheritance from his father. He has an option to receive P2.5 M at the end of 10 years, however he wishes to receive the money at the end of each year for 6 years. If interest rate is 8% how much would he receive every year?Your uncle has P375,000 and wants to retire. He expects to live for another 25 years, and he also expects to earn 7.5% on his invested funds. How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account?Your evil step-uncle wishes to leave you some of his wealth. You must choose how he wills the money to you. OptionA: He ‘gives’ you $1000.00. He will invest the money on your behalf, at 7.5% per annum, compounded monthly. He will add $1000 to the account at the end of each year. At his death the accumulated sum will pass to you. Option B: He ‘gives’ you $2000.00 per year until he dies. This money is not invested, and the accumulated sum will pass to you at his death. a) If you knew Uncle was going to die in 5 years, which option would you choose? How much money would you inherit from Option A? From Option B? b) If you knew Uncle was going to die in 20 years, which option would you choose? How much money would you inherit from Option A? From Option B?
- A man will buy a house and lot worth P300,000 in a subdivision in Metro Manila. His carrying charges is P34,200 to the price of this house and lot. Further he will be obliged to pay it over a period of 20 years. Though his monthly amortization does not look much as a burden to his income, what is the annual rate?Your retired client has accumulated investment and retirement assets totaling $5,981,000. Assume the client expects to live for another 15 years and that he assumes an annual inflation rate of 3.9 percent. To leave his heirs the future value of the $5,981,000 at the end of the 15 years, and maintain an inflation-adjusted lifestyle of $210,000 a year for all 15 years, the client’s investments would have to earn an average of ______ percent a year for the entire 15 years.Mr. Grayson is considering giving up his paid employment and going into business on his ownaccount. He is considering buying a quarry pit with a “life” of about 35 years. To purchase thisbusiness, he would have to pay sh 4,750,000 now. Mr. Grayson wishes to retire in 20 years’time. He predicts that the net cash operating receipts from this business will be sh 1,250,000 perannum for the first 15 years and sh 1,000,000 per annum for the last 5 years. He thinks that thebusiness could be sold at the end of the 20 year period for sh 1,500,000. Additionally, heestimates that certain capital replacements and improvements would be necessary and this shouldamount to sh 100,000 per annum for the first 5 years; sh 150,000 per annum for the next 5 years,sh 200,000 per annum for the next 7 years and nothing for the last three years. This expenditurewould be incurred at the start.Mr. Grayson has excluded any compensation to himself from the above data. If he shouldpurchase the business, however, he…
- Your grandfather is retiring at the end of next year. He would like to ensure that his heirs receive payments of $11,600 a year forever, starting when he retires. If he can earn 12.0 percent annually, how much does your grandfather need to invest to produce the desired cash flow? (Round answer to 2 decimal places e.g. 15.25.)A man will buy a house and lot worth P 300,000 in a subdivision in Metro Manila. His carrying charges is P 34,200 to the price of this house and lot. Further he will be obliged to pay it over a period of 20 years. Through his monthly amortization does not look much as a burden to his income, what is the annual rate? Oi- 9.567% Oi- 9% O i= 10% Oi- 9.50%Luis has $160,000 in his retirement account at his present company. Because he is assuming a position with another company, Luis is planning to roll over his assets to a new account. Luis also plans to put $2,000/quarter into the new account until his retirement 22 yr from now. If the account earns interest at the rate of 8%/year compounded quarterly, how much will Luis have in his account at the time of his retirement?Please round the answer to the nearest cent.Hint: Use the compound interest formula and the annuity formula.
- Mitchell plans to retire in 3 years with $518,000.00 in his account. If he receives payments of $121,890.95 per year and he receives his first $121,890.95 payment in 3 years and his last $121,890.95 payment in 7 years, then what is the expected annual return for his account? 5.68% (plus or minus 1 bps) 16.32% (plus or minus 1 bps) 8.86% (plus or minus 1 bps) 10.84% (plus or minus 1 bps) none of the answers are within 1 bps of the correct answerr. Grayson is considering giving up his paid employment and going into business on his own account. He is considering buying a quarry pit with a “life” of about 35 years. To purchase this business, he would have to pay sh 4,750,000 now. Mr. Grayson wishes to retire in 20 years’ time. He predicts that the net cash operating receipts from this business will be sh 1,250,000 per annum for the first 15 years and sh 1,000,000 per annum for the last 5 years. He thinks that the business could be sold at the end of the 20 year period for sh 1,500,000. Additionally, he estimates that certain capital replacements and improvements would be necessary and this should amount to sh 1000,000 per annum for the first 5 years; sh 150,000 per annum for the next 5 years, sh 200,000 per annum for the next 7 years and nothing for the last three years. This expenditure would be incurred at the start. Mr. Grayson has excluded any compensation to himself from the above data. If he should purchase the business,…Luis has $140,000 in his retirement account at his present company. Because he is assuming a position with another company, Luis is planning to "roll over" his assets to a new account. Luis also plans to put $3000/quarter into the new account until his retirement 25 years from now. If the new account earns interest at the rate of 2.5%/year compounded quarterly, how much will Luis have in his account at the time of his retirement? Hint: Use the compound