Pension plan is obligated to make disbursements

Assignment Help Financial Management
Reference no: EM131078242

A pension plan is obligated to make disbursements of $2.7 million, $3.7 million, and $2.7 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 10% annually. (Do not round intermediate calculations. Round your answer to 4 decimal places.)

Reference no: EM131078242

Questions Cloud

Cost of capital and cost of additional equipment : Frank Smith Plumbing Data Needed foranalysis: Project Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year -7 Year- 8 Cost of Capital (borrowing) 7.5% Cost of Truck $185,000 Cost of additional equipment attached to truck $25,000 Tax rate 25% Annual Before ..
What was average real risk-free rate and premium : You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 16 percent, –5 percent, 19 percent, 13 percent, and 10 percent. Suppose the average inflation rate over this period was 2.2 percent and the average T-bil..
Total dollar return on this investment over the past year : Suppose you bought a 7.4 percent coupon bond one year ago for $900. The bond sells for $940 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nominal rate of return on th..
Capital budgeting criteria-ethical considerations : A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $10 million at Year 0 to mitigate the environ..
Pension plan is obligated to make disbursements : A pension plan is obligated to make disbursements of $2.7 million, $3.7 million, and $2.7 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 10% annually.
Cost of the party as an entertainment expense : Evander, an officer in the Marine Corps, was appointed commanding officer of the Marine training base in Beaufort, S.C. As is customary in connection with changes in command, he hosts a party at his home for officers and guests the night before he as..
What was dividend yield and the capital gains yield : Suppose a stock had an initial price of $80 per share, paid a dividend of $0.60 per share during the year, and had an ending share price of $88. What was the dividend yield and the capital gains yield?
What is the portfolio beta : You own a stock portfolio invested 34 percent in Stock Q, 18 percent in Stock R, 36 percent in Stock S, and 12 percent in Stock T. The betas for these four stocks are 1.03, 1.09, 1.49, and 1.94, respectively. Required: What is the portfolio beta?
Describe the different types of leases : Describe the different types of leases. Explain how they would benefit managers for financial planning. Select one lease option and describe the advantages and disadvantages of selecting that option in your role as manager. In response to your peers,..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Compare the variables in the binomial model

Compare the variables in the binomial model with those in the black-scholes-mertion model. Note any differences or similarity and explain

  How might you try to use futures contracts

How might you try to use futures contracts on euros to capitalize on this tendency? How could you determine whether such a strategy would have been profitable in previous periods?

  Calculate the price value of basis point and the yield value

Calculate the price value of a basis point and the yield value of a price change for a 30-year US Treasury bond with a coupon of 5%, a maturity date of 8/15/2042, a settlement date of 10/29/2012, and a price of 101:24.

  What is your estimate of the stocks current price

A company currently pays a dividend of $1.5 per share (D0 = $1.5). It is estimated that the company's dividend will grow at a rate of 22% per year for the next 2 years, then at a constant rate of 7% thereafter. The company's stock has a beta of 1.3, ..

  What is the banks asset utilization ratio

A bank has interest income to total assets ratio of 5% and has noninterest income of $30 million and total assets of $750 million. What is the bank's asset utilization ratio?

  Compute the cash flow for johnson siding

Johnson Siding has a gross profit of $1,200,000 and $400,000 in depreciation expense. Selling and administrative expense is $250,000. Given that the tax rate is 40 percent, compute the cash flow for Johnson Siding

  Annual investments in a fund

Suppose you make 30 annual investments in a fund that pays 4% compounded annually. If your first deposit is $9,000 and each successive deposit is 4% greater than the preceding deposit, how much will be in the fund immediately after the 30th deposit?

  Investment has installed cost-discount rate is infinite

An investment has an installed cost of $576,382. The cash flows over the four-year life of the investment are projected to be $205,584, $249,318, $197,674, and $165,313. If the discount rate is zero, what is the NPV?  If the discount rate is infinite..

  Unscrupulous lender-what is the effective interest rate

Imagine you are discussing a loan with a somewhat unscrupulous lender. You want to borrow $20,000 for one year. The interest rate is 12.5 percent. You and the lender agree that the interest on the loan will be 0.125 × $20,000 = $2,500. So the lender ..

  What are the floatation costs for issuing preferred share

The preferred stock of Gator Industries sells for $34.63 and pays $2.77 per year in dividends. What is the cost of preferred stock financing?  What are the floatation costs for issuing the preferred share and how should this cost be incorporated into..

  Find the cost of this short-term financing

James Corporation has the following terms with its suppliers: 2/10, net 60. It normally takes the discount and pays within ten days. However, due to cash shortage, it intends to delay the payment. Find the cost of this short-term financing for James...

  What is the bonds after-tax yield

An investor recently purchased a corporate bond which yields 9%. The investor is in the 36% combined federal and state tax bracket. What is the bond's after-tax yield?

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