Real dollars in an account

Assignment Help Financial Management
Reference no: EM131060434

You want to have $2 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 10 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal?

Reference no: EM131060434

Questions Cloud

Statement that stock prices follow random walk implies : The statement that stock prices follow a random walk implies that:
The expected rate of return on a bond : The expected rate of return on a bond if bought at its current market price and held to maturity.
Interest rates increase-alue of those assets will fall : If interest rates increase 3 percent and the average duration of a bank’s $100 million of assets is 4 years, the value of those assets will fall:
Yield curve is a good predictor of future interest rates : Empirical research suggests that the yield curve is a good predictor of future interest rates
Real dollars in an account : You want to have $2 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 10 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal?
What is the company sustainable growth rate : The Wintergrass Company has an ROE of 13.7 percent and a payout ratio of 40 percent. What is the company’s sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
What is the benefit and cost of the protective put : Two very popular strategies when holding a stock are: 1) Covered Call and 2) Protective Put. Looking at the payoff of these strategies. What is the benefit and cost of the protective put if you start holding a stock? What is the benefit and cost of t..
Managing growth assignment : Working Capital Simulation: Managing Growth Assignment Due Mar 28, 11:59 PM Not Submitted POINTS 8 Paper no new messages Objectives: 6.1 5.3 3.2 more Instructions Assignment Files Grading Resources: Harvard Business Publishing: Working Capital Simula..
Company weighted average flotation cost : Suppose your company needs $15 million to build a new assembly line. Your target debt-equity ratio is 0.85. The flotation cost for new equity is 12.5 percent, but the flotation cost for debt is only 6.5 percent. What is your company’s weighted averag..

Reviews

Write a Review

Financial Management Questions & Answers

  Project under consideration has the cash flows

A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: What is the NPV for the project if the required return is 10 percent?

  What is projected free cash flow to equity

What is projected free cash flow to equity for the coming year?

  Currently your firms cost of equity

Assume your firm is zero-growth and pays all its net income in dividends each year Also assume your firm can borrow money when it needs to at an interest rate of 6%. Currently your firm’s cost of equity (Rs) is 10%, but if any money is borrowed that ..

  What is the operating cash flow and cash flow to creditors

Weiland Co. shows the following information on its 2014 income statement: sales = $162,500; costs = $80,000; other expenses = $3,300; depreciation expense = $9,000; interest expense = $6,500; taxes = $22,295; dividends = $8,150. In addition, you're t..

  What is the embedded interest rate offered by the bank

A bank offers an investment opportunity, which requires you to invest 10,000 today and the bank promises to return 15,000 in 10 years. What is the embedded interest rate offered by the bank? You require $500,000 at the end of your retirement, which i..

  Higher subsequent returns

You analyzed the returns of a sample of stocks. You found that, on average, the firms with high E/P ratios have higher subsequent returns. (i) Discuss an explanation for this pattern that is consistent with the EMH. (ii) Discuss an explanation that i..

  Considering adding robotic paint sprayer to production line

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,074,000.00, and it would cost another $19,900.00 to install it. The machine falls into the MACRS 3-year class (the applicable MA..

  What is the firms expected rate of return

Preston Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return?

  Price paid to the bondholder if the issuer calls the bond

A 7.4 percent corporate coupon bond is callable in five years for a call premium of one year of coupon payments. Assuming a par value of $1,000, what is the price paid to the bondholder if the issuer calls the bond?

  Spot price of crude oil-what was the net convenience yield

In January 201x, the spot price of crude oil was $45.65 a barrel and the one year futures price was $56.38 per barrel. The interest rate was about 0.15 percent. What was the net convenience yield? Interpret/explain that result.

  Determine the equivalent uniform monthly cost of owning

An engineering freshman wants to purchase a laptop computer for use during the 5 years that she plans to study engineering at Louisiana Tech University. Use an interest rate of 12%, compounded monthly, and determine the equivalent uniform monthly cos..

  Developing a balanced scorecardneed for organisations to

developing a balanced scorecardneed for organisations to measure and manage performance against objectives as well as

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