Reference no: EM13974530
(Annuity interest rate) Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $6,903.27 that will pay them $1,000 per year for 25 years. They don’t have the slightest idea what return they would be making on their investment of $6,903.27.
What rate of return would they be earning? The annual rate of return your folks would be earning on their investment is _____% (Round to two decimal places)
Please show the formula for the answer.
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Target capital structure-debt-preferred stock-common equity
: Rollins Corporation is constructing its MCC schedule. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its before-tax cost of debt is 12%. The firm's net income is expected to be $1 million, a..
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Use the annual sales figure when evaluating this project
: Winnebagel Corp. currently sells 30,000 motor homes per year ay $73,000 each and 14,000 luxury motor coaches per year at $120,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 25,000 of thes..
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Firm relax collection efforts if opportunity cost of funds
: The Boyd Corporation has annual credit sales of $1.6 million. Current expenses for the collection department are $35,000, bad-debt losses are 1.5%, and the days sales outstanding is 30 days. Should the firm relax collection efforts if the opportunity..
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Which alternative has lowest effective annual interest rate
: Cost of Bank Loans Del Hawley, owner of Hawley’s Hardware, is negotiating with First City Bank for a 1-year loan of $50,000. First City has offered Hawley the following alternatives. Calculate the effective annual interest rate for each alternative. ..
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Annuity interest rate
: (Annuity interest rate) Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $6,903.27 that will pay them $1,000 per year for 25 years. What rate o..
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Apply tax rate to both the lump sum and the yearly payments
: You just won the 800 million dollar lottery. You have the option of taking 500 million as one lump sum or 25.8 million TODAY (year 0) then 25.8 million for the next 30 years. We need to pay taxes. Assume the tax rate is 40 percent for all payments. H..
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What is the operating cash flow and ocf
: Daniel's Market has sales of $36,600, costs of $28,400, depreciation expense of $3,100, and interest expense of $1,500. If the tax rate is 34 percent, what is the operating cash flow, OCF?
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What is the addition to retained earnings
: Chevelle, Inc. has sales of $487,000 and costs of $394,500. The depreciation expense is $43,800. Interest paid equals $18,200 and dividends paid equal $6,500. The tax rate is 35 percent. What is the addition to retained earnings?
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The additional paid-in surplus account
: The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,420,000, $144,000 in the common stock account and $2,690,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed long-term debt of $1..
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