What is the present value of the amount

Assignment Help Finance Basics
Reference no: EM131990144

Question: Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year free of teaching and other administrative responsibilities at full pay. For a professor earning $62,500 per year who works for a total of 42? years, what is the present value of the amount she will earn while on sabbatical if the interest rate is 8% (EAR)?

Note: Assume that the sabbatical annual salary is paid in one lump sum every 7 years.

Reference no: EM131990144

Questions Cloud

Calculating the risks in making investment decisions : Read the case study entitled BG Group: Calculating the Risks in Making Investment Decisions.
What is the implied volatility of the currency exchange rate : what is the implied volatility of the currency exchange rate?
Prepare the journal entry to record the note : Prepare the journal entry to record the note on November 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first).
Considering purchasing bond on the secondary market : You are considering purchasing a bond on the secondary market that pays annual coupons, has 30 years to maturity,
What is the present value of the amount : Many academic institutions offer a sabbatical policy. Every seventh year a professor is given a year free of teaching and other administrative responsibilities.
Corporation had earnings before interest and taxes : ABC Corporation had earnings before interest and taxes (EBIT) of $100,000 in year 2016. ABC’s income tax rate was 40%. During 2016,
What is the implied volatility of the futures price : If the price of a five month European put futures option, with strike $20, is $1.64, what is the implied volatility of the futures price?
Do you believe contracts should be more flexible : Do you believe contracts should be more flexible to allow for changes in the terms of the agreement when conditions change?
What would you recommend to small business owners : What would you recommend to small business owners regarding the value of creating and monitoring budgets (cash and operating) as well as calculating ratios.

Reviews

Write a Review

Finance Basics Questions & Answers

  Federal income tax owed by an investor

1. What is the federal income tax owed by an investor in the 35 percent income tax bracket (15 percent tax rate on long-term capital gains and dividend income)?

  Current place of employment or an organization

Explain this use in your current place of employment or an organization you are familiar with. Describe concerns with properly controlling this flow, including keeping it safe from unauthorized use.

  Describe the five methods used to categorize retailers

Explain the different methods for the study and practice of retailing.

  What is expected in the future in term of future performance

Valuation of a firm's financial assets is said to be based on what is expected in the future, in terms of the future performance of the firm, the industry, and the economy.

  Capital structure and return on invested capital

Short-term liquidity Capital structure and solvency and return on invested capital

  Compute the equivalent uniform annual costs of owning

A piece of machinery costs $10,000. After 5 years, the salvage value is $1,000. Annual maintenance costs are $500. If the interest rate is 10%, compute the equivalent uniform annual costs of owning this equipment for 5 years.

  The gilbert instrument corporation is considering replacing

the gilbert instrument corporation is considering replacing the wood steamer it currently uses to share guitar sides.

  What constitutes significant influence when an investors

what constitutes significant influence when an investors financial interest is below the 50

  What is the break-even point in units for the company

Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incur..

  Explain the reasons why u.s. listed foreign firms are valued

Explain "free cash flows." Why do managers like to retain free cash flows instead of distributing it to shareholders? Discuss what mechanisms may be used to solve this problem?

  Computation of break even points

Computation of break even points - how large can his fixed operating costs be if he is to meet his profit target and what is his breakeven level of sales at the level of fixed operating costs determined.

  General principles of underlying forwards

Explain the general principles of underlying forwards, futures, and swaps. Include in your answer:

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