Calculate the net cost of insurance

Assignment Help Financial Management
Reference no: EM131179105

Suppose you are 46 and have a $180,000 face amount, 14-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $630. The cash value of the policy is expected to be $7,200 in 14 years. Using time value of money and assuming you could invest your money elsewhere for a 8 percent annual yield, calculate the net cost of insurance. UseExhibit 1-B. (Do not round intermediate calculations. Round time value factor to 3 decimal places and final answer to the nearest whole dollar.)

Reference no: EM131179105

Questions Cloud

What are the effective proven corrective measures : What are the common causative factors? What does data indicate? What are the effective proven corrective measures?
Reflection of management philosophy : What do you think is meant by the statement, "an organization is a reflection of its management's philosophy, values, vision, and goals"?  Why is this important and how does it impact employees across an organization?  To increase the depth of you..
List two reasons why a company would pursue onshoring : List two reasons why a company would pursue onshoring or insourcing. List two reasons why a company would not pursue onshoring or insourcing.
Determine the enterprise resource planning : Find a news item within the past 6 months about a company that has benefitted from enterprise resource planning.
Calculate the net cost of insurance : Suppose you are 46 and have a $180,000 face amount, 14-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $630. The cash value of the policy is expected to be $7,200 i..
What is the yield to maturity of the bond : May Industries has a bond outstanding that sells for $839. The bond has a coupon rate of 5.10 percent and 25 years until maturity. What is the yield to maturity of the bond? A bond with a maturity of 18 years sells for $1,058. If the coupon rate is 7..
Create and describe a comprehensive security policy : Present the rationale for the logical and physical topographical layout of the planned network. Create and describe a comprehensive security policy for this data-collection and analysis company.
Assume that the provident health system : Assume that the Provident Health System, a for-profit hospital, has $1 million in taxable income for 2008, and its tax rate is 30 percent. A. Given this information, what is the firm’s net income? B. Suppose that the hospital pays out $300,000 in div..
What is their yield to call-yield to maturity for these bond : Soprano’s Spaghetti Factory issued 18-year bonds two years ago at a coupon rate of 6.50 percent. If these bonds currently sell for 94.95 percent of par value, what is the YTM? Atlantis Fisheries issues zero coupon bonds on the market at a price of $4..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Brokerage account-future year until your account totals

You have $16,107.51 in a brokerage account, and you plan to deposit an additional $6,000 at the end of every future year until your account totals $250,000. You expect to earn 11% annually on the account. How many years will it take to reach your goa..

  Calculate operating cash flows of project- firms tax bracket

Laurel’s Lawn Care, Ltd., has a new mower line that can generate revenues of $180,000 per year. Direct production costs are $60,000, and the fixed costs of maintaining the lawn mower factory are $25,000 a year. Calculate the operating cash flows of t..

  Why is the concept of the time value of money

Why is the concept of the time value of money important for companies when considering investing in assets & why is the concept of the time value of money important for companies when considering what type of debt instrument (bond) they should issue ..

  Cash budget to determine key methods

From the scenario, analyze TFC’s cash budget to determine key methods in which the budget may be optimized (e.g., by renegotiating terms and conditions on some of its payables, etc.). If you believe that there is room for improvement, recommend key s..

  Forecasts the year-end free cash flows

Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. Year 1 2 3 4 5 FCF -$22.24 $38.7 $43.4 $51.1 $55.5 The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 3..

  Developing drugs for neurological diseases

A young listed company developing drugs for neurological diseases. So far the company has not shown any sales due to the typically long lead times to produce medicines. The market now is on is volatile, its beta value = 2 , the access to capital is u..

  What is crisp required return

An analyst has model the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If b, 1=0.7 and d, 2 = 0.9 what is ..

  About relationship between required return and stock price

Red Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.25 next year. The growth rate in the dividends for all 3 companies is 4%. The required return for each company’s stock is 8%, 11%, & 14% respectively. What is the stock price for..

  Describe for evelyn several steps

After graduating from college last fall, Evelyn Bradley took a job as a consumer credit analyst at a local bank. From her work reviewing credit applications, she realizes that she should begin establishing her own credit history. Describe for Evelyn ..

  Nontraditional health services

Let’s assume you are charged with opening a new women’s health center in downtown Washington DC. located near the White House. The center will offer a full spectrum of health services for women from preventative health services, nontraditional health..

  Dividend is expected to grow by the same amount

North Carolina Haymakers Inc. ("NCHI") has just paid a dividend of $1.65 per share. Sales and profits for Pale Hose are expected to grow at a rate of 3% per year. Its dividend is expected to grow by the same amount. If the required return is 14%, wha..

  Describe the basic features of open credit lines

Describe the basic features of the following:a. Open credit lines b. Asset based loans c. Term commercial loans d. Short term real estate loans

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