Time value of money

Assignment Help Financial Management
Reference no: EM132073923

Time Value of Money

COLLAPSE

You have just won the $1,000,000 in the lottery. You have the option of taking a lump sum payout or equal annualized payments over 20 years. Ignoring any tax consequences; how much should you expect from the annualized payments. What target interest rate would make the annualized payments more valuable than the lump sum. In your response, you may want to consider such issues as inflation, investing lump sum in stock market (What have been the long-term historic returns?) to generate your own annualized payment schedule, as well as the psychological components – receiving a $1,000,000 check.

Reference no: EM132073923

Questions Cloud

Proposed expansion of existing subsidiary : You are evaluating a proposed expansion of an existing subsidiary located in Switzerland.
Calculate net asset value and fund returns : Be able to describe the expenses associated with investment in mutual funds, calculate net asset value and fund returns
Company is deciding whether to invest in new machine : Option to Wait: Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $375,000 per year.
Six-month forward rate on norwegian krone : Using the approximation, the six-month forward rate on the Norwegian krone would have to be Kr/$ ________ to prevent arbitrage.
Time value of money : You have just won the $1,000,000 in the lottery. What have been the long-term historic returns?
Indirect costs of issuing securities : Which of the following are indirect costs of issuing securities?
What are the initial notional principal and coupon of the IO : What are the initial pool, pass-through, and PO principal amounts, and what are the initial notional principal and coupon of the IO?
Present value decrease as the discount rate increases : Why does present value decrease as the discount rate increases?
Planning to purchase car : Amal is planning to purchase a car. How much would Amal save if she paid the car off over 4 years instead of 5 years?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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