Deposit the present value-investment account

Assignment Help Financial Management

Reference no: EM13811316

Bill O'Blarney tells you that he plans to give you $1 million as a birthday present on your 75th birthday. You are now 25—and a bit skeptical. You suggest that he deposit the present value of this nice gift today in an investment account for you. If the investment could earn 8 percent annually for the next 50 years, how much should he deposit today? (Ignore taxes.)

Reference no: EM13811316

Questions Cloud

Manufacture several lines of pressure washers : An industrial firm can manufacture several lines of pressure washers. The demand for a particular component required for a pressure washer is 120,000 per year. The firm has the following two options: Buy option: A supplier is willing to provide this ..

Determine the equivalent annual savings : The owner of a business is considering investing $55,000 in new equipment. She estimates that the net cash flow will be $5,000 during the first year and will increase by $2,500 per year each year thereafter. Determine the annual capital recovery cost..

Managing people and organizations : You will prepare and submit a research paper on an approved topic related to Managing People and Organizations. The length of the paper should be somewhere between 12 and 15 pages and include at least 10 academic resources. (Usually, an academic r..

Capital structure have on firms profit-return on equity : Seattle Health Plans currently uses zero debt financing. Its operating profit is $1 million, and it pays taxes at a 40 percent rate. It has $5 million in assets and, because it is all-equity financed, $5 million in equity. What impact would the new c..

Deposit the present value-investment account : Bill O'Blarney tells you that he plans to give you $1 million as a birthday present on your 75th birthday. You are now 25—and a bit skeptical. You suggest that he deposit the present value of this nice gift today in an investment account for you. If ..

Determine which version of the software should be used : Microsoft has released Windows Server 2008. As with Windows 2003, there are several versions of the server software. What are these versions, and what are the criteria that determine which version of the software should be used

Compute the future worths of projects at the end of period : Compute the future worth’s of the projects at the end of period 7. Assume that the required service period is seven years and that the company is considering a comparable equipment that has an annual lease expense of $10,000 for period seven (to be p..

Google model of principal cloud computing services : Based on the Barr (2010) article, how can the Google model of principal cloud computing services-similar in function to Windows Azure cloud computing infrastructure-be used as a substitute for on-premises disk management

What is the interest rate in the korean market : Suppose that a US interest rate is 4% and the forward rate for the Korean won is 1 won = $0.001 and the spot rate is 1 won = $0.0011. What is the interest rate in the Korean market? (Assume that the US is home and the interest rate parity holds.) Ple..

User Account

All Pages