The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Derek Isabel Meredith George Contract Terms Contract Amount $450,000 490,000 525,000 350,000 Payment Date 2 years 3 years Today 1 year Required: 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most?

The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Derek Isabel Meredith George Contract Terms Contract Amount $450,000 490,000 525,000 350,000 Payment Date 2 years 3 years Today 1 year Required: 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 4P

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The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Contract Terms Contract Amount Payment Date Derek Isabel $490,000 2 years 530,000 3 years Meredith George 420,000 Today 390,000 1 year Required: 1-a. Assuming an annual discount rate of 8%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Assuming an annual discount rate of 8%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) Derek Isabel Meredith George Present Value
Amir joined Takaful Sayang by paying RM400 per month. Takaful Sayang, with a contract of mudharabah investment, has two accounts which are Participant Special Account (PSA) and Participant Account (PA). The takaful offers the following PSA rates: Year PSA (%) First 100* Second Third Fourth Fifth -10 -40 -50 -60 Sixth to tenth -70 Eleventh onwards -80 * Initial percentage. Any positive or negative increment in the monthly rates shown above is based on the initial rate in the first year. After twenty-five (25) years, Amir wants to terminate the takaful contract. Based on the above information, answer the following questions. (a) How much is the total amount of money that has become tabarru' in that Takaful? (b) Assume that Amir neither claims nor makes any withdrawal during the period of his contribution to the Takaful and his total investment profit for twenty-five years is RM20,500 (one-off only). How much is the total amount of money that will be received by Amir after he closes the…
A life insurance company issues a 10-year term insurance policyto a life aged 50, with sum insured $100 000. Level premiums are payablemonthly in advance throughout the term. You are given the following premium assumptions. (i) Commission is 20% of each premium payment in the first year (incurredat the premium payment times) and 5% of all premiums after the firstyear. (ii) Additional initial expenses are $100. (iii) Claim expenses are $250. (iv) The sum insured and claim expenses are payable one month after the dateof death. (v) Mortality follows the Standard Select Life Table, with UDD betweeninteger ages.(vi) i = 5%. Calculate the gross monthly premium.
A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of january 1, 2020, one 50- year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to the participants benefits. Present value of postretirement benefit cash flow stream ut the date of retirement s30.000 Present value of postretirement cash flow stream an jan. 1, 2020 $4.000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 20207 Select one a. $2,133 b. $1.391 C.$1,600 d. $12.000
The following information related to the Postretirement Benefits (health) for the Union Company on 12/31/2020: Expected postretirement Benefits Obligation (EPBO) $ 800,000, and the Accumulated Postretirement Benefits Obligation (APBO) is $400,000. Attribution period 20 years. Number of years employees worked to date 10 years. Interest rate 10%. Required: a. Calculate the EPBO at end of 2021. b. Calculate accumulated postretirement benefits (APBO) for 2021. c. Analyze the increase in 2021 APBO.
The Johns Hopkington Hospital needs to borrow $3,000,000 to purchase an MRI. The interest rate for the loan is 6%. Principal and interest payments are equal debt service payments, made on an annual basis. The length of the loan is 5 years. The CFO of Johns Hopkington wants to develop a loan amortization schedule for this debt borrowing for tomorrow morning's meeting. Prepare such a schedule using Appendix G. For your entry in Blackboard, you will enter your calculated interest expense and principal payments for years 1-5. Consider emailing me your amortization schedule in case there are errors.Year 1: interest expense and principal paymentYear 2: interest expense and principal paymentYear 3: interest expense and principal payment Year 4: interest expense and principal payment Year 5: interest expense and principal payment
A postretirement plan promises health care coverage for all employees who retire after age 62 and complete service of 15 years. As of January 1, 2020, one 50-year old participant has rendered services for 8 years, and is expected to retire at age 65. The following amounts pertain to the participant's benefits. Present value of postretirement benefit cash flow stream at the date of retirement $30,000 Present value of postretirement cash flow stream on Jan. 1, 2020 $4,000 What is the value of the accumulated postretirement benefit obligation (APBO) on January 1, 2020? Select one: O O O a. $2,133 b. $1,391 c. $1,600 d. $12,000
Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows:Benefit CostHealth insurance—single $ 5,000Health insurance—with spouse $ 8,000Health insurance—with spouse and dependents $ 11,000Dental and vision $ 1,500Dependent care—any specified amount up to $5,000 VariableAdoption benefits—any specified amount up to $5,000 VariableCash—any specified amount up to $15,000 plan benefit Variable401(k)—any specified amount up to $10,000 VariableFor each of the following independent circumstances, determine the amount of income Matt must recognize and the amount of deduction Fresh may claim: (Leave no answer blank. Enter zero if applicable.)Problem 12-49 Part b (Static) a) Matt elects the single health insurance benefit and places 10,000 dollars in his 401Kb) Matt selects the single health insurance benefit, is reimbursed $5,000 for dependent care,…
An uninsured patient cannot pay for a major life threatening surgery. ABC Health offers the patient long term financing where the entire amount can be paid in full for 3 years. The cash price of the surgery is $100,000.00 and a contract is issued with an implicit rate of 5.5% Beginning Ending Year 1 2 3 Accounts Instructions A. Record the journal entry as of the surgery date Accounts $100,000.00 Accounts $111,303.00 Accounts Debit Accounts B. At the end of the first year ABC recognizes interest associated with the loan Debit $105,500 Debit Interest C. At the end of the second year ABC recognizes interest associated with the loan Debit $5,500 $5,803 $6,122 Debit Credit D. At the end of the third year ABC recognizes interest associated with the loan Credit Credit Credit E. The patient pays the full amount of the loan receivable at the end of the third year Credit $105,500.00 $ 111,303.00 $ 117,425.00
‏Bank Sohar provides a financing facility based on‏murabahah to the Purchase Orderer principles to‏Ahmad for the purpose of house purchase.‏The financing is amounting to OR 55000 at a‏constant rate of return 3% for a period of 8 years.‏Calculate the annual installment payment.
‏Bank Sohar provides a financing facility based on‏murabahah to the Purchase Orderer principles to‏Ahmad for the purpose of house purchase.‏The financing is amounting to OR 55000 at a‏constant rate of return 3% for a period of 8 years.‏Calculate the annual installment
Suppose a life insurance company sells a $230,000 one-year term life insurance policy to a 24-year-old female for $240. The probability that the female survives the year is 0.999514. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.)