Time Value of Money, Corporate Finance

Assume that the average age of the worker is 25 years old. Typically, retirement is at 65. The firm provides a $2000 monthly payment for 25 years for retirees (i.e., 300 monthly payments). The first monthly payment is at age 65. Assume that the firm has already set aside $1,800 per worker to fund its pension liability. Determine the monthly contribution the firm must make to fully fund its liability. Assume the firm makes its first contribution to the pension fund at the end of each month until worker is 65. Assume an annual interest rate of 8%. Must show how to do this problem using your financial calculator. Now do this problem again, and assume that the monthly retirement payments increase by .25% per month.
Posted Date: 2/20/2013 5:59:33 PM | Location : United States







Related Discussions:- Time Value of Money, Assignment Help, Ask Question on Time Value of Money, Get Answer, Expert's Help, Time Value of Money Discussions

Write discussion on Time Value of Money
Your posts are moderated
Related Questions
Question: a) The new capital management framework provides an upgrade of the old version in terms of new risk management techniques. What is the scope of application for the n

Question: a) Give an analytical derivation of the Capital Asset Pricing Model (CAPM) and supplement your analysis with diagrammatic illustrations where appropriate. b) The

a) Cookie Monster Inc. (a $15 billion snack food company) is considering acquiring Keebler Elves but is unsure of how much is should be willing to pay for the target firm.  At the

As the company''s sales and earnings increased, so did the demand for capital. The firm''s needs included inventory as well as additional space to house the inventory, computer fac

Calculating Cost of Equity. Bohannon Corporation''s common stock has a beta of 1.10. If the risk-free rate is 4.5% and the expected return on the market is 12%, what is the company

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

develop a corporate finance project and dissices all ground of financials areas

What is the impact of monetary policy on cost of capital

Cavo Corp. has 9 percent coupon bonds making annual payments with a YTM of 8.3 percent. The current yield on these bonds is 8.65 percent. How many years do these bonds have le

You have ten million dollars to allocate across two projects, code named 'Wombat' and 'Marmot.' Both projects are somewhat scalable, in that you could potentially invest as much (u