Calculate the annual cash flows

Assignment Help Financial Management
Reference no: EM131576647

Calculate the following:

a. Calculate the annual cash flows from a $2.5 million, 20-year fixed-payment annuity earning a guaranteed return of 7 percent per year if payments are to begin at the end of the current year.

b. Calculate the annual cash flows from a $2.5 million, 20-year fixed-payment annuity earning a guaranteed return of 7 percent per year if payments are to begin at the end of year 6.

c. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $240,000 for 20 years? Assume that the annuity will earn 7 percent per year.

Reference no: EM131576647

Questions Cloud

The sarbanes-oxley act : The Sarbanes-Oxley (SOX) Act was enacted in 2002 for companies in the private sector as a result of the Enron and other scandals.
Suicide prevention for soldiers returning from deployment : Suicide Prevention for Soldiers returning from Deployment - creating a logical argument to influence an audience - address a counter-argument or misconception
Explain the meanings they convey to readers : Explain the meanings they convey to readers, How do these elements enrich the poem and deepen your understanding of its themes
Separate pages for the list of reference sources : The paper should be from 2,000 to 3,000 in length (8-12 pges) and contain a separate title or cover page and separate pages for the list of reference sources.
Calculate the annual cash flows : Calculate the annual cash flows from a $2.5 million, 20-year fixed-payment annuity earning a guaranteed return of 7 percent per year
Verify that hermitian matrix is similar to a diagonal matrix : Verify that a Hermitian matrix is similar to a diagonal matrix, and that all its eigenvalues are real.
What are the consequences of people not being vaccinated : What are the consequences of people not being vaccinated? Why are vaccinations necessary components of the healthcare programs?
How many multiplication-division are necessary for same task : If n = 3, then direct evaluation of takes 12 multiplications and 5 additions. How many multiplications and additions does the evaluation of a determinant.
Pre and post retirement to reach their goals : What return do they need pre and post retirement to reach their goals? What portfolio pre and post retirement would you recommend?

Reviews

Write a Review

Financial Management Questions & Answers

  Marketing survey to determine the viability of the product

Pappy’s Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $127,000 for a marketing survey to determine the viability of the product. Calculate the Time 0 cash flow for this project.

  Constant payout ratio dividend policy

The company follows a constant payout ratio dividend policy. If Headline generates $1.25 millon in income this year, how much will be paid in dividends?

  What do you anticipate your salary

If you are earning a salary of $40,000 in 2016 and expect to receive 4% raises per annum on January 1, what do you anticipate your salary will be in 2025? You hope to buy your dream car 5 years from now. Today, that car costs $88,000 but you expect t..

  Required lump-sum payment-how large must the deposit be

To complete your last year in business school and then go through law school, you will need $35,000 per year for 4 years, starting next year (that is, you will need to withdraw the first $35,000 one year from today). How large must the deposit be? Ho..

  Call option-what is the current stock price

A call option is currently selling for $4.60. It has a strike price of $60 and four months to maturity. A put option with the same strike price sells for $8.30. The risk-free rate is 6 percent, and the stock will pay a dividend of $2.10 in three mont..

  Considering two alternative five year leases

Genesco is considering two alternative 5-year leases. what lease payment amount on the second lease would the company be indifferent between these two options?

  Debt paying-what is cost of equity

Your boss has asked for your help in analyzing a company, Dragon, Inc., and you determine the following: Dragon has $50 million in debt paying 10% annually, while the equity is valued at $100 million. The WACC for the company is 12 %. If the corporat..

  Experiencing rapid growth-what is the projected dividend

Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 15 percent over the following year, and then 8 percent per year indefinitely. The required return on this stock is 14 percen..

  What is arnells annual interest tax shield

What is the present value of the interest tax shield today and What is Arnells annual interest tax shield?

  Marketable securities are sold before borrowing funds

Wizard Electronics Company's actual sales and purchases for April and May are shown here along with forecasted sales and purchases for June through September. The maximum desired cash balance is $50,000. Excess cash (above $50,000) is used to buy mar..

  What is the value of the company stock-zero growth model

The Johnson Company has been very successful in the past five years. Over these years, it paid common stock dividend of $ 3 in the first year, $3.20 in the second year, $4.2 in the third year, $4.5 in the fourth year and its most recent dividend was ..

  Price will eliminate triangular arbitrage

Assume you are a trader with Deutsche Bank. From the quote screen on your computer terminal, you notice that Dresdner Bank is quoting €0.7627/$1.00 and Credit Suisse is offering SF1.1806/$1.00. You learn that UBS is making a direct market between the..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd