What is the size of the settlement

Assignment Help Finance Basics
Reference no: EM132546755

Calculating Annuity Values. You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years before the plaintiff is able to return to work. The jury has already decided in favor of the plaintiff. You are the foreperson of the jury and propose that the jury give the plaintiff an award to cover the following:

(a) The present value of two years' back pay. The plaintiff's annual salary for the last two years would have been $43,000 and $46,000, respectively.

(b) The present value of five years' future salary. You assume the salary will be $49,000 per year.

(c) $200,000 for pain and suffering.

(d) $25,000 for court costs. Assume that the salary payments are equal amounts paid at the end of each month. If the interest rate you choose is an EAR of 7 percent, what is the size of the settlement? If you were the plaintiff, would you like to see a higher or lower interest rate?

Reference no: EM132546755

Questions Cloud

Calculate the current price of the corporate bond : Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?
Find calculate the two variances for material : Find Calculate the two variances for material, two variances for labor, and two variances for factory overhead. Direct Material 600,000 kgs
What must the coupon rate be on the bonds : Barnes Enterprises has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and a price of $963.
What is the required journal entry : The Board of Commissioners of the City, When the budget is formally integrated in to the accounting records, what is the required journal entry?
What is the size of the settlement : If the interest rate you choose is an EAR of 7 percent, what is the size of the settlement? If you were the plaintiff, would you like to see a higher or lower i
Find how negotiation between the supplying and buying units : Find how negotiation between the supplying and buying units may be used to set transfer prices. How does this relate to the general transfer pricing rule?
What was the company net profit for the previous year : Find What will the new break-even point be if fixed costs increase by 10 per cent? Lucid Images Ltd manufactures premium high definition televisions
Comparing cash flow streams : You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements.
Calculating annuity present values : Beginning three months from now, you want to be able to withdraw $2,500 each quarter from your bank account to cover college expenses over

Reviews

Write a Review

Finance Basics Questions & Answers

  Sharpe products has 1 million outstanding shares and 7

sharpe products has 1 million outstanding shares and 7 directors to be elected. cumulonimbus holdings owns 200000

  What would be the bonds theoretical value

Calculate the following for both bonds using semiannual analysis.

  Adversely affect the wealth of the shareholders

HA 3011 - Advanced Financial Accounting - What implications do you think these rules have for the relevance and representational faithfulness of US corporate

  What is the yield to maturity at a current price

Heyman company bonds have 4 years left to maturity.interest is paid annually and the bonds have $1000 par value and the coupon rate of 9%. a. What is the yield to maturity at a current price of(1) $829 and (2)$1104?

  Evaluating investment projects in given problem

Why are incremental cash flows rather than contributions to reported earnings the appropriate basis for evaluating investment projects?

  Calculate the cost of the trade credit

Assume the credit terms offered to your firm by your suppliers are 3.4/4,Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30.

  What is the yield of the above bonds if interest coupon paid

What is the yield of the above bonds if interest (coupon) is paid monthly?

  To finance the purchase ranch manufacturing will sell

to finance the purchase ranch manufacturing will sell 10-year bonds paying 6.6 per year at the market value of the

  What interest rate must you have earned

You deposit $5,000 into an account for 5 years with quarterly compounding. At the end of 5 years, the account balance is $6,800.

  Determining the weighted average cost of capital

Using free cash ?ow computed in Question 1 and the weighted average cost of capital computed in Question 2, estimate BrandCo's enterprise value using the growing-perpetuity formula. Assume free cash ?ow grows at 5 percent. Describe your answer.( 1..

  We receive a 200000 mortgage from the gensinger bank for

we receive a 200000 mortgage from the gensinger bank for 100 years. a vp at the bank robert tells us to fully amortize

  What is the implied one-year forward rate

One-year and two-year maturity, default-free, zero-coupon bonds have yields-to-maturity of 7% and 8% respectively. What is the implied one-year forward rate, one year from today?

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