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Marcy Gross wants to save money to meet three objectives. First, she would like to be able to retire 30 years from now with retirement income of $24,000 per month for 15 years, with the first payment received 30 years and 1 month from now. Second, she would like to purchase a cabin in Jersey Coast in 15 years at an estimated cost of $624,000. Third, after she passes on at the end of the 15 years of withdrawals, he would like to leave an inheritance of $700,000 to her daughter Rebecca. Marcy can afford to save $1,800 per month for the next 15 years. |
| If Marcy can earn a 11 percent EAR before she retires and a 8
percent EAR after she retires, how much will she have to save each
month in Years 16 through 30? |
In: Accounting
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Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $24,000 per month for 15 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 20 years at an estimated cost of $1,034,000. Third, after he passes on at the end of the 15 years of withdrawals, he would like to leave an inheritance of $850,000 to his nephew Frodo. He can afford to save $1,800 per month for the next 20 years. |
| If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 21 through 30? |
In: Finance
Yuse and Yal want to save money for retirement. They also love to travel. They graduated from college some time ago, but are just now thinking of getting around to saving for retirement. They want to be able to spend $50,000 per year in retirement in addition to what Social Security pays. They also want to have $500,000 left at the end to pass along to their family. They figure to travel for five years, then have a couple of children and contribute to a retirement fund for the 22 years the kids are growing up, and then travel for five more years using money saved outside of the retirement plan.. They will make no contributions in the years they are travelling. After that they plan to live in retirement for 25 years and then die. They figure on an average return of 8% before retirement and 6% after that. Ignore the effects of inflation. How much do Yus and Yal have to invest for each of the twenty productive years?
In: Finance
SOS Ltd is currently an all-equity firm and has a market value of $800,000. SOS is evaluating whether a levered capital structure would maximize the wealth of shareholders. The cost of equity is currently 15%. The new capital structure under consideration is an issue of $400,000 new perpetual debt with an 8% interest rate. There are currently 32,000 shares outstanding and a tax rate of 35% applies to this firm. If SOS finally changes to the new levered capital structure,
(a) Calculate the WACC under the levered capital structure. (Show your calculations).
(b) What are the stock prices of SOS before and after announcement of the new capital structure? Explain the price change briefly. (Show your calculations).
(c) Suppose the actual stock price of SOS after announcement of the new capital structure is lower than your answer in part (d) above, what could be the possible reasons for this?
In: Finance
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $23,000 per month for 15 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 20 years at an estimated cost of $977,000. Third, after he passes on at the end of the 15 years of withdrawals, he would like to leave an inheritance of $750,000 to his nephew Frodo. He can afford to save $1,700 per month for the next 20 years.
Required: If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 21 through 30?
In: Finance
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $24,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 15 years at an estimated cost of $542,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $850,000 to his nephew Frodo. He can afford to save $1,700 per month for the next 15 years. Required: If he can earn a 10 percent EAR before he retires and a 9 percent EAR after he retires, how much will he have to save each month in years 16 through 30?
In: Finance
decided to invest in the Bank of America in a $ 10,000
certificate of deposit for 5 years that pays an interest rate of
3.5% annually (simple interest). Suppose that the interest payment
is sent annually to your home by check and that this money is
taxable. When the certificate matures, he will receive his $ 10,000
back (non-taxable amount). Wesley's marginal tax rate is 24% and
headline inflation is expected to be 2% per year.
Determine for this investment instrument:
(a) The rate of return before tax, ignoring inflation.
(b) The rate of return after tax, ignoring inflation
(c) The rate of return after taxes, considering inflation
You must use Excel to solve these problems and display all your
computations. Include comments and annotations when you deem it
necessary (for example, to make a presumption).
Please help me and use Excel only and it's functional functions please. Thanks a lot!
In: Finance
A boy standing on the ground close to a building throws a ball vertically upward. From his measurements of the maximum height, y-max, to which the ball rises and the time required to reach this height, the boy calculates that the average velocity of the ball on its way up is 20 m/s. Five seconds after leaving the boys hand, the ball is caught by a girl who has stretched her arm out of a window some distance above the boy. You may use -9.8 m/s^2 for the value of g.
a. What is the velocity of the ball immediately after its release?
b. How high does the ball rise; i.e., what is the value of y-max?
c. At what height, y, above the point of release is the ball caught?
d. What is the velocity of the ball immediately before being caught
In: Physics
You're planning a two-week excursion with your significant other (and or your best friend). Your destination locations are as follows: Istanbul, Cairo, and Maldives. Your budget for the entire trip (for both of you - 2 people) is $11,000 in total. Use what you've learned in the course thus far to decide on a destination. Answer the following question:
1. How would you go about making a decision using project management methodology?
2. Looking first at cost, what decision would you make?
3. After cost, what other factors should be considered before making a decision?
You will outline your estimate with all associated cost for each location. Keep in mind this is an estimate (detailed estimate). You will decide your destination after capturing all costs for each location.
In: Accounting
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $25,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 15 years at an estimated cost of $574,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $700,000 to his nephew Frodo. He can afford to save $1,800 per month for the next 15 years. If he can earn a 10 percent EAR before he retires and a 6 percent EAR after he retires, how much will he have to save each month in years 16 through 30?
In: Finance