Which alternative would you choose if money can earn 8.25%

Assignment Help Finance Basics
Reference no: EM13909698

1) You work for a company that provides a pension plan to which the company contributes 50 percent of the amount you contribute. For example, if you specify that $1000 of your annual salary is to go into the plan, the company will add $500 to make the total contribution $1500 per year. The plan guarantees an annual rate of return of 6%.

If you believe you can safely earn 8% per year by investing money yourself, is it worthwhile belonging to the company plan in order to get the company's $500 contribution each year? Assume that you expect to retire in 30 years and that you will set aside $1000 per year at the end of each of the next 30 years regardless of the plan you choose.

2) A lottery offers the winner the choice between $150,000 cash prize or month-end payments of $1000 for 12 ½ years, increasing to $1500 per month for the next 12 ½ years. Which alternative would you choose if money can earn 8.25% compounded monthly over the 25-year period?

Reference no: EM13909698

Questions Cloud

Symbolic interaction perspective media analysis : Symbolic Interaction Perspective Media Analysis
Victory company uses weighted average process costing : Victory Company uses weighted average process costing to account for its production costs
Find the social marginal cost curve : The demand (MB) for a good is given by P= 20-Q. The private marginal cost is given by PMC= 6+Q, and the marginal damage function is given by MD = 2+Q. Find the social marginal cost curve
The influence of corporate sourcing decisions : The influence of corporate sourcing decisions interacts with internal design, production, finance, marketing, and accounting-True-False
Which alternative would you choose if money can earn 8.25% : A lottery offers the winner the choice between $150,000 cash prize or month-end payments of $1000 for 12 ½ years, increasing to $1500 per month for the next 12 ½ years. Which alternative would you choose if money can earn 8.25% compounded monthly ..
Feasibility study outlined in the daniels and dickson (1990) : feasibility study outlined in the Daniels and Dickson (1990) article as a model, and including a minimum of six other scholarly sources, create a 12- to 15-page feasibility study that includes the following headings and supporting information:
Find the pmf for number of customers entering the mth bus : Find the PMF for the number of customers entering the mth bus given that the interarrival interval between bus m - 1 and bus m is x.
Examine the validity of the assumptions made : Examine whether the laboratories are consistent in their measurements of the differ-ences in the amounts of niacin. Examine the validity of the assumptions made in your analysis
Calculate amounts for the new debt issuance : Calculate amounts for the new debt issuance and complete the amortization schedule and Complete the journal entries for the new debt issuance and first interest payment.

Reviews

Write a Review

Finance Basics Questions & Answers

  On-line banking a competitive advantage

on-line banking a competitive advantage

  How much will the eps be after the proposed repurchased

The DOTDOT Company has earnings available for common stockholders of RM4 million and has 320,000 shares of common stock outstanding at RM50 per share. The firm is currently contemplating the payment of RM3.50 per share in cash dividends.

  Qabc corporation wishes to increase 20 million its stock

q.abc corporation wishes to increase 20 million. its stock price is now 20 each share. new issue will be priced at 18

  Prepare a report for the mayor and city council

Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting r..

  Find the present value of these ordinary annuities

find the present value of these ordinary annuities. discounting occurs once a year.a. 400 per year for 10 years at 10b.

  Your company is considering a new project that will require

your company is considering a new project that will require 1055000 of new equipment at the start of the project. the

  Return on investment at reasonable or even high stand-alone

To prepare for this Discussion, consider your organization or one with which you are familiar, and its current riskiness. Develop an idea for a new product or service that has the potential to generate a good return on investment at reasonable or eve..

  Inventory and cost of goods sold and journal entries

Inventory and cost of goods sold and journal entries - Prepare the sales portion of the entry for this sale on Randy's books. and Prepare the cost of sales portion of the entry for this sale on Randy's books.

  A project has an initial outla of 4000 it has a single

a project has an initial outla of 4000. it has a singlepayoff at the end of the year 4 of 6996.46. what is the internal

  Under what conditions would you use a t-test as opposed to

1.under what conditions would you use a t-test as opposed to a z-test? can you use the t-table to determine the

  How does the u.s. tax code help or hinder

Review your list of personal financial goals. For each goal, how does the U.S. Tax Code help or hinder you in achieving it?

  Determine the internal rate of return for the proposed sale

determine the internal rate of return for the proposed sale

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