What would be the future value of the annual savings

Assignment Help Financial Management
Reference no: EM131130757

Karen and Mike currently insure their cars with separate companies, paying $900 and $1,100 a year. If they insured both cars with the same company, they would save 15 percent on the annual premiums. What would be the future value of the annual savings over 10 years based on an annual interest rate of 3 percent? (Using 11.464 for future compound )

Reference no: EM131130757

Questions Cloud

Problem for employees in your department : Develop a PowerPoint Presentation and identify the source of the problem for employees in your department.
What is a categorical imperative : Who was Kant? -Why his perspective is called Deontologism? - What is a Categorical Imperative and how did it differ from utlitarianism?
Review the social media channels : Review the social media channels you have used throughout the course so far. Reflect on what you have learned about each. Which is your preferred, and why?
Compare and contrast the aztec and mongol civilizations : Please compare and contrast the Aztec and Mongol civilizations. Look at their social, political, economic, religious and military structures. Please be sure to cite all of the information that you use from your sources.
What would be the future value of the annual savings : Karen and Mike currently insure their cars with separate companies, paying $900 and $1,100 a year. If they insured both cars with the same company, they would save 15 percent on the annual premiums. What would be the future value of the annual saving..
Calculate how much insurance coverage policy : When Carolina’s house burned down, she lost household items worth a total of $125,000. Her house was insured for $225,000 and her homeowner’s policy provided coverage for personal belongings up to 70 percent of the insured value of the house. Calcula..
Find a professional with a job you would like to have work : For this assignment, please find a professional either with a job you would like to have, would like to learn more about their industry or are working for a company you hope to work for.
Identify victim of specific crime with background different : Discuss how it might impact their families based on their cultural background. Discuss how it might be perceived by society based on the victim's cultural background.
Essay on troubleshooting communication : Write essay in which you:- Briefly summarize your chosen instance of failed communication.- Discuss the reasons why the original persuasive campaign was unsuccessful.

Reviews

Write a Review

Financial Management Questions & Answers

  Project taking into account the flotation costs

The expansion project at Zingerman requires an initial investment of $10,000,000. The target D/E ratio is 3/2 for the firm. Flotation costs are 10% for equity and 4% for debt. How much funds have to be raised for this project taking into account the ..

  A quoted company is considering several long-term sources

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

  Dividend reinvestment plan increase amount of equity capital

If a firm repurchases its stock in the open market, the shareholders who tender the stock are subject to capital gains taxes. If you own 100 shares in a company’s stock and the company’s stock splits 2 – for – 1, then you will own 200 shares in the c..

  Evaluate the proposed acquisition of a new special-purpose

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $320,000. The truck falls into the MACRS 10-year class, and it will be sold after 10 years for $57,000. The firm's marginal t..

  Assume interest payments are paid semi-annually

A 5.75 percent coupon bond with 12 years left to maturity is offered for sale at $978.83. What yield to maturity is the bond offering? (Assume interest payments are paid semi-annually and par value is $1,000.) Please show all work and formulas.

  What weight should use for debt-calculating cost of capital

DeVille Industrial Machines issued 143,000 zero coupon bonds four years ago. The bonds originally had 30 years to maturity with a 7.3 percent yield to maturity. Interest rates have recently increased, and the bonds now have an 8.4 percent yield to ma..

  Fixed-rate mortgage-loan in form of single balloon payment

You need a 35-year, fixed-rate mortgage to buy a new home for $245,000. Your mortgage bank will lend you the money at an APR of 5.4 percent for this 420-month loan. However, you can afford monthly payments of only $850, so you offer to pay off any re..

  More on ratio analysis-use return on equity

Analysts and investors often use return on equity (ROE) to compare profitability of a company with other firms in the industry. ROE is considered a very important measure, and managers strive to make the company’s ROE numbers look good. Based on your..

  The capital budgeting decision model

The capital budgeting decision model that utilizes all the discounted cash flow of a project is the ________ model, which is one of the single most important models in finance.

  What is the expected rate of return of this asset

An asset has a 15% chance of a -10% return, a 25% chance of a 0% return, a 25% chance of a 5% returns, and a 35% chance of a 20% return. What is the expected rate of return of this asset?

  Explain precisely what rate expectations are consistent

Explain precisely what expectations are consistent with selling the December 2014 Eurodollar futures contract to make a profit. Explain precisely what rate expectations are consistent with buying the December 2014 Eurodollar futures contract to make ..

  Compute the irr and mirr for project erie

Based on the cash flows shown in the chart below, compute the IRR and MIRR for Project Erie. Suppose that the appropriate cost of capital is 12 percent. Advise the organization about whether it should accept or reject the project.

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