UREicGail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino's employer has offeredan early retirement incentive by agreeing to pay her $310,000 today if she agrees to retire immediately. Ms. Trevino desires to earn arate of return of 10 percent. (PV of $1& and PVA of $1)Note: Use appropriate factor(s) from the tables provided.rawRequireda. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration inmaking the retirement decision, should Ms. Trevino accept her employer's offer?Note: Round your final answer to the nearest whole dollar value.Present valueShould Ms. Trevino accept the offer?< Prev2 of 15MacBook AirNext >

Present value is the concept in finance that determines the current worth of a future sum of money…

Gail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino's employer has offered an early retirement incentive by agreeing to pay her $310,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 10 percent. (PV of $1& and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer's offer? Note: Round your final answer to the nearest whole dollar value. Present value Should Ms. Trevino accept the offer?

Gail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino's employer has offered an early retirement incentive by agreeing to pay her $310,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 10 percent. (PV of $1& and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer's offer? Note: Round your final answer to the nearest whole dollar value. Present value Should Ms. Trevino accept the offer?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Gail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino’s employer has offered an early retirement incentive by agreeing to pay her $354,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 8 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer’s offer? (Round your final answer to the nearest whole dollar value.)
Gail Trevino expects to receive a $500,000 cash benefit when she retires five years from today. Ms. Trevino’s employer has offered an early retirement incentive by agreeing to pay her $325,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 8 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required Calculate the present value of the $500,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer’s offer? (Round your final answer to the nearest whole dollar value.)
Claire Fitch is planning to begin an individual retirement program in which she will Invest $2,800 at the end of each year. Fitch plans to retire after making 30 annual Investments in the program earning a return of 8%. What is the value of the program on the date of the last payment (30 years from the present)? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "FV of an Ordinary Annulty" to 4 decimal places and final answer to the nearest whole dollar.) Periodic Cash Flow x f (FV of an Ordinary Annuity) Future Value
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Claire Fitch is planning to begin an individual retirement program in which she will invest $2.200 at the end of each year. Fitch plans to retire after making 30 annual investments in the program earning a return of 10%. What is the value of the program on the date of the last payment (30 years from the present)? (PV of $1. EV of $1, PVA of $1. and EVA of 5) (Use appropriate factor(s) from the tables provided. Round your "FV of an Ordinary Annuity" to 4 decimal places and final answer to the nearest whole dollar)
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. 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? Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 If she can invest money at 11%, which option would you recommend that she accept? First option Second option
Suppose your aunt has worked for 40 years and has accumulated a "nest-egg" of $1,000,000. She wishes to begin receiving an annual payment beginning next year, and continuing for another 20 years. If a pension plan will guarantee her an annual interest rate of at least 5% effective, what is her payment? Please show procedure and formulas used. Thanks
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J and J are looking to save for retirement and the following applies: Estimated Income Needed (Annual): $ 50,000 Estimated Social Security Benefit and Pension (annual): $ 35,000 Inflation factor is 3% for 30 years Anticipated Return on Assets held after retirement is 6% Based on the information above, please estimate how much additional retirement savings should J and J have at retirement to meet their financial goals.
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 $138,000 immediately as her full retirement benefit. Under the second option, she would receive $25,000 each year for 6 years plus a lump-sum payment of $57,000 at the end of the 6-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 12%. 1-b. If she can invest money at 12%, which option would you recommend that she accept?

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