Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $130,000 immediately as her full retirement benefit. Under the second option, she would receive $19,000 each year for 5 years plus a lump-sum payment of $75,000 at the end of the 5-year period. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1-a. Calculate the present value for the following assuming that the money can be invested at 11%. 1-b. If she can invest money at 11%, which option would you recommend that she accept?
Calculate present value :
First option = 130000
Second option = (19000*3.696+75000*0.593) = 114699
First option should be accepted
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits...
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $127,000 immediately as her full retirement benefit. Under the second option, she would receive $14,000 each year for 10 years plus a lump-sum payment of $53,000 at the end of the 10-year period. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables....
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $141,000 immediately as her full retirement benefit. Under the second option, she would receive $20,000 each year for 8 years plus a lump-sum payment of $60,000 at the end of the 8-year period. Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables....
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $141,000 immediately as her full retirement benefit. Under the second option, she would receive $20,000 each year for 8 years plus a lump-sum payment of $60,000 at the end of the 8-year period. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables....
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $130,000 immediately as her full retirement benefit. Under the second option, she would receive $19,000 each year for 5 years plus a lump-sum payment of $75,000 at the end of the 5-year period. Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factors) using tables....
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $139,000 immediately as her full retirement benefit. Under the second option, she would receive $26,000 each year for 7 years plus a lump-sum payment of $58,000 at the end of the 7-year period.Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.Required:1-a. Calculate the...
We were unable to transcribe this imageThe Atlantic Medical Clinic can purchase a new computer system that will save $5,000 annually in billing costs. The computer system will last for three years and have no salvage value. Use Excel or a financial calculator to solve. Round answers to the nearest dollar. Required: Up to how much should the Atlantic Medical Clinic be willing to pay for the new computer system if the clinic's required rate of return is: Present Value...
Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment. Year 1 Year 2 Year 3 Year 4 Investment X Investment y $ 3,000 $ 6,000 4,000 5,000 5,000 4.000 6,000 3,000 Total $ 18,000 $18,000 Click here to view Exhibit 11B-1, to determine the appropriate discount factor(s) using tables. Required: Compute the present value of the cash inflows for each investment using a 10% discount rate. (Round discount factor(s)...
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