How much will you pay for the policy

Assignment Help Financial Management
Reference no: EM131972413

Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $39,000 per year forever. Assume the required return on this investment is 6.4 percent.

How much will you pay for the policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Policy value today            $

Reference no: EM131972413

Questions Cloud

Calculate the present value of the payments for option : Calculate the present value of the payments for option (a) if the interest rate is 1.00% per month.
Analysis where you might use discounted cash flows : Describe three different examples of analysis where you might use discounted cash flows.
What profit margin must the firm achieve : What profit margin must the firm achieve?
What must total asset turnover be : What must total asset turnover be?
How much will you pay for the policy : How much will you pay for the policy?
What are its tie ratio and its return on invested capital : What are its TIE ratio and its return on invested capital (ROIC)?
Find the future values of the ordinary annuities : Find the future values of the following ordinary annuities:
Overall forecast of the movement against the dollar : Then, aggregate all of these impacts to develop an overall forecast of the krank's movement against the dollar.
A firm offer must have consideration to be enforceable : All firm offers are good for three months. An FOB contract is always a shipment contract. A firm offer must have consideration to be enforceable.

Reviews

Write a Review

Financial Management Questions & Answers

  Firm can pay for project and still earn required return

A firm is considering a project that will generate perpetual after-tax cash flows of $18,000 per year beginning next year. The project has the same risk as the firm’s overall operations and must be financed externally. What is the most the firm can p..

  What were the total futa and suta taxes for the payroll

What were the total FUTA and SUTA taxes for the payroll?

  NPV of the project and should you pursue the project

A business opportunity has presented itself to you and one of your classmates. Your opportunity is to enter the fast growing craft beer industry. Your projected sale in the first year is 7500 kegs. Your projected growth rate is 5 percent. Entering th..

  What will be the systems money supply

Assume a financial system has a monetary base of $25 million. The required reserves ratio is 10 percent and there are no leakages in the system. What is the size of the money multiplier? What will be the system’s money supply?

  What should the no-arbitrage price of the call be

Suppose that, in each period, the cost of a security either goes up by a factor of 2 or goes down by a factor of 1/2 (i.e.,u= 2, d= 1/2). If the initial price of the security is 100, determine the no-arbitrage cost of a call option to purchasse the s..

  Makes massive batch of macaroni-what is target service level

The restaurant you are working at makes one massive batch of macaroni and cheese each day. If you run out before the end of the day, the last few customers are less than satisfied, but if you make too much, it can be sold to the local hog farmer for ..

  What has happened to mike november bonds capital gains yield

The market rate of interest falls to 6.1% over the next year. What has happened to Mike November’s bonds “capital gains yield?”

  What is the expected return on a portfolio

what is the expected return on a portfolio which is invested 40 percent in stock A and 60 percent in stock B?

  Numerous critics of both the world bank and the imf

There are numerous critics of both the World Bank and the IMF. Chief among them is Joseph Stiglitz, nobel laureate.

  What is future value of this investment at the end of year

You are given an investment to analyze. The cash flows from this investment are End of year. What is the future value of this investment at the end of year five if 6.86 percent per year is the appropriate interest (discount) rate?

  Is this compelling argument for low dividend-payout ratio

After completing its capital spending for the year, Carlson Manufacturing has $2,500 extra cash. Carlson’s managers must choose between investing the cash in Treasury bonds that yield 3 percent or paying out the cash to investors who would invest in ..

  Calculate the net present value-IRR and Profitability Index

The manager of PPO Inc. plans to manufacture engine blocks for classic cars from the 1960s. The revenue from the blocks will be $750,000 per year for each of the next 4 years. The equipment will cost $800,000 depreciated using a 3 year MACRS life. Ca..

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