Find the duration of plan obligations if interest rate

Assignment Help Financial Management
Reference no: EM131088148

A pension plan is obligated to make disbursements of $2.7 million, $3.7 million, and $2.7 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 10% annually. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Duration              years

Reference no: EM131088148

Questions Cloud

Management of connelly and his role in making crown : Describe the industry structure. Include things such as competition, suppliers, material changes, pricing, etc. Make your answer somewhat predictive of how you believe the industry is evolving. Talk about the management of Connelly and his role i..
What is the weighted average cost of capital for firm : WACC The current stock price for a company is $38 per share, and there are 5 million shares outstanding. The beta for this firms stock is 1.1, the risk-free rate is 4.7, and the expected market risk premium is 6.4%. What is the weighted average cost ..
Write a summary of your findings : Write a summary of your findings. Guidelines for your interview and sample questions are available on the companion Web site.
Prior to completing this discussion : Reflect IconReflect: In the Critical Literary Theories handout, four different kinds of critical approaches are presented. Consider which of the four theories you find most interesting as a means for understanding literature.
Find the duration of plan obligations if interest rate : A pension plan is obligated to make disbursements of $2.7 million, $3.7 million, and $2.7 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 10% annually.
Discuss the legal position of the parties : Discuss the legal position of the parties involved in respect of the van, freezer and the washing machine.
What is the expected return on portfolio : A stock has a beta of 1.14 and an expected return of 10.5 percent. A risk free asset currently early 2.4 percent. What is the expected return on a portfolio that is equally invested in the two assets? If a portfolio of the two assets has a beta of .9..
Calculate the expected NPV : An auto plant that costs $200 million to build can produce a line of flexfuel cars that will produce cash flows with a present value of $260 million if the line is successful but only $120 million if it is unsuccessful. Calculate the expected NPV
Information about the causes of patient complaints : The front office staff and nurses tally information about the causes of patient complaints. What quantitative performance improvement tool(s) would you use to select he problem areas to work on first?

Reviews

Write a Review

Financial Management Questions & Answers

  The current spot exchange rate

The current spot exchange rate is $1.55 = €1.00 and the three-month forward rate is $1.60 = €1.00. Consider a three-month American call option on €62,500 with a strike price of $1.50 = €1.00. If you pay an option premium of $5,000 to buy this call, a..

  Average-risk investment in mineral water spring project

The Rodriguez Company is considering an average-risk investment in a mineral water spring project that has a cost of $155,000. The project will produce 950 cases of mineral water per year indefinitely. Assume that cash flows consist only of after-tax..

  Briefly explain what a credit default swap

Briefly explain what a credit default swap is and its role in the 2008 AIG bailout. Briefly explain the following Greeks: Delta, Theta, Gamma, Vega, Rho.

  Cost of preferred stock-cost of equity

Scholes Industries has a target capital structure consisting of 45% debt, 10% preferred stock, and 45% common equity. The before tax YTM on Scholes's long term bonds is 9.5%, its cost of preferred stock is 8%, and its cost of equity is 12.5% if the f..

  Initial investment in fixed assets when evaluating projects

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 11 years ago for $8 million in anticipation of using it as a warehouse and distribution site, What is the pro..

  Cease paying dividends forever

Robber Corp. pays a constant $9 dividend on its stock. The company will maintain this dividend for the next 13 years and will then cease paying dividends forever. If the required return on this stock is 9.5 percent, what is the current share price?

  Evaluation of an active portfolio management strategy

How is the Sharpe measure different from the Treynor measures of portfolio performance evaluation? What is the problem with using the Sharpe measure for evaluation of an active portfolio management strategy?

  Appropriate discount rate-what is the present value

An investment will pay you $81,000 in four years. Assume the appropriate discount rate is 6.25 percent compounded daily. Required: What is the present value?

  Project requires initial investment-produce cash inflows

A project requires an initial investment of $21,600 and will produce cash inflows of $4,900, $14,200, and $8,700 over the next three years, respectively. What is the project's NPV at a required return of 14 percent?

  The present value of these series of cash flows

You receive $2,800 at the end of each year for 25 years starting at the end of year 1 and ending at the end of year 25 EXCEPT for years 11, 12 and 13. For years 11, 12 and 13, you will make payments (not receive payments) of $1,000 at the end of thos..

  Growing quickly-what is the current share price

Yang Corp. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 7.5 percent thereafter. If the required return is 13 percent and the company just paid a $2..

  What is the present value of the coca-cola futures contract

What is the present value of the Coca-Cola futures contract? If the contract settles at 105-8, are current market interest rates higher or lower than the standardized rate on a futures contract? Explain. What is the implied annual interest rate on th..

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