MANAGERIAL ACCOUNTING F/MGRS.
6th Edition
ISBN: 9781264100590
Author: Noreen
Publisher: RENT MCG
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Chapter 7A, Problem 7A.2E
To determine
Concept Introduction:
The time value of money is a concept that is applied to evaluate the projects having future
The better option of the investment.
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Asked Mar 12, 2020
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Basic Present Value Concepts
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $150,000 immediately as her full retirement benefit. Under the second option, she would receive $14,000 each year for 20 years plus a lump-sum payment of $60,000 at the end of the 20-year period.
Required:
If she can invest money at 12%, which option would you recommend that she accept? Use present value analysis.
What is the maximum monthly social security benefit a person can receive if retiring exactly 1 year after full retirement age in 2022?
Group of answer choices
$3,613
$3,345
$3,500
$4,148
2022 max monthly SS benefit is $4,194 (Age 70) • 2022 max monthly SS benefit is $3,345 (Full Retirement Age) • 2022 max monthly SS benefit is $2,364 (Age 62) • Benefits are increased annually to account for inflation
(Cost of Living Adjustments).•
2011-2021 Average = 1.60%
2022 = 5.9%
Basic Present Value Concepts
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $150,000 immediately as her full retirement benefit. Under the second option, she would receive $14,000 each year for 20 years plus a lump-sum payment of $60,000 at the end of the 20-year period.
Required:
If she can invest money at 12%, which option would you recommend that she accept? Use present value analysis.
Chapter 7A Solutions
MANAGERIAL ACCOUNTING F/MGRS.
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