User Account

All Pages

What interest rate assumption have annn

Assignment Help Financial Management
Reference no: EM131928222

Interest rate for an annuity Personal Finance Problem Anna Waldheim was seriously injured in an industrial accident. She sued the responsible parties and was awarded a judgment of $2, 500 ,000.

Today, she and her attorney are attending a settlement conference with the defendants. The defendants have made an initial offer of ?$199,198 per year for 24years.

Anna plans to counteroffer at ?$321,159 per year for 24 years. Both the offer and the counteroffer have a present value of ?$2, 500,000 ?The amount of the judgment. Both assume payments at the end of each year.

a. What interest rate assumption have the defendants used in their offer? (rounded to the nearest whole? percent)?

b. What interest rate assumption have Anna and her lawyer used in their counteroffer? (rounded to the nearest whole? percent)?

c. Anna is willing to settle for an annuity that carries an interest rate assumption of 9?%. What annual payment would be acceptable to her?

a. The interest rate assumption the defendants used in their? offer, r?, is$_______?%.(Round to the nearest whole? percent.)

Reference no: EM131928222

Questions Cloud

Find the sinking fund deposit : Find the net outstanding balance on the loan at time 5 immediately after the 5th outlay.Find the sinking fund deposit;
Calculate the cost of retained earnings : The All-But-Comatose Corporation (ABC) has Common Stock with a current dividend of $3.20 per share that is selling for $78 per share.
How many years would you need to own the property : You are deciding whether to own or rent a single family residence. You could rent the property for $3,100 a month, or you could buy the property for $550,000.
What is the rate of return that lloyd company will earn : Lloyd Company invested $10,271 in production machinery. What is the rate of return (or interest) that Lloyd Company will earn from this investment
What interest rate assumption have annn : Interest rate for an annuity Personal Finance Problem Anna Waldheim was seriously injured in an industrial accident.
How many units must be sold to yield a profit : Fixed expenses total $120,000 annually. How many units must be sold to yield a profit of $30,000
What is the effect of financing with crypto currencies : What is the effect of financing with crypto currencies (short term) on the capital structure of the company and how would that influence
Traditional foreign currencies : To what extent should the company report about the use of crypto currencies in receivables and payments and (when different) is that different
Analyzing liquidity ratios as part : How do crypto currencies (in assets and or liabilities) influence working capital, cash cycle and operating cycle in the assessment

Reviews

Write a Review

Financial Management Questions & Answers

  Individual when computing his federal tax liability

Which of the following choices is the most beneficial tax consequence to an individual when computing his federal tax liability?

  What is the standard deviation of this investment

Your investment has a a 40% chance of earning a 15% rate of return, a 50% chance of earning a 10% rate of return, and a 10% chance of losing 3%. What is the Standard deviation of this investment?

  What is the coupon rate of annual bond

What is the coupon rate of an annual bond that has a yield to maturity of 8.5%, a current price of $942.32, a par value of $1,000 and matures in thirteen years?

  Under what circumstances might junk bond

The yield to maturity on your new bond is 5.5% with a 10-year remaining life. Immediately after you buy the bond, market interest rates drop significantly, and they remain low for the next 10 years. Under what circumstances might a junk bond seem lik..

  Calculate the value of the firm and the firm equity

The MoMi Corporation's income before interest, depreciation and taxes, was $2.9 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 17% of pre..

  Pays no dividends and will not engage in stock transactions

The company pays no dividends and will not engage in any stock transactions.

  What is the internal rate of return and net present value

Robert purchased a new copy machine for his business. The copy machine was purchased for $12,500 and is expected to generate the following cash flows for the next four years: What is the net present value? What is the internal rate of return? Should ..

  In the lease versus buy decision leasing often preferable

In the lease versus buy decision leasing often preferable

  Considering five-year project to open new product line

A company is considering a 5-year project to open a new product line. A new machine with an installed cost of $80,000 would be required to manufacture their new product, which is estimated to produce sales of $70,000 in new revenues each year. what i..

  Assuming constant rate of inflation

Suppose there exists a bank that offers an APR of 5.4% indefinitely on current deposits. If you wanted to setup an account that would pay monthly instalments of $3000 indefinitely, how much should your initial deposit be?

  Taxable income for the earlier years of corporate existence

For the year ended December 31, Year 6, Taylor Corp. had a net operating loss of $200,000. Taxable income for the earlier years of corporate existence, computed without reference to the net operating loss, was as follows

  How much will you pay for policy

how much will you pay for the policy?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd