Full coverage or colorado minimum

Assignment Help Financial Management
Reference no: EM131573740

You are having a hard time deciding whether to get full coverage insurance for your new Suzuki GSXR 1000 crotch rocket or to get the minimum coverage for Colorado. The motorcycle shop gives you a sweet deal, you pay exist12,000 for the bike. Full coverage insurance will cost you exist400 per month. In the event of theft you have a exist500 deductible, but after that the bank will give you full book value of the bike assuming a useful life of 10 years and straight line depreciation. Salvage value after 10 years is exist3000. Bare bones liability (does not cover theft and will give you no money for a stolen bike) will cost you exist100 per month. You are planning a trip to Daytona in exactly 2 years, at that time the bike is guaranteed to get stolen and you will not buy another. To help you make up your mind, assume a discount rate of 6%/year compounded monthly - you must consider the time-value of money! Dont simply add the cash flows. Determine the net present value to answer: Full Coverage or Colorado minimum?

Reference no: EM131573740

Questions Cloud

What is occurring between the taste buds : What is occurring between the taste buds and the brain that would lead to the complaint? Specifically discuss the areas of the brain that may be affected.
How many students checked at least one of the statements : A college conducted a survey to explore the academic interests and achievements of its students. It asked students to place checks beside the numbers.
Issue dividends to their shareholders : Growth technology companies typically do not issue dividends to their shareholders.
Define national information on the characteristics of gangs : There is national information on the characteristics of gangs.The definition of a gang has not been firmly established.
Full coverage or colorado minimum : Determine the net present value to answer: Full Coverage or Colorado minimum?
Will the investment meet your minimum acceptable return : Will the investment meet your minimum acceptable return of 10% or is the bond broker trying to pull a fast one? SHOW WORK.
The self-transcendence theory : You as the advanced practice nurse are working in a community mental health center.
Roi tables are based on simple compounding of interest : The ROI tables are based on simple compounding of interest, looking into the present (P), future (F), or into annual (A) equivalents.
Discussion boards are collaborative learning experiences : Discussion boards are collaborative learning experiences. For each forum, you are required to post 1 thread of at least 400 words. For each thread,

Reviews

Write a Review

Financial Management Questions & Answers

  Annual salary through payroll deduction and matches dollar

Kristin Caldwell has just graduated from college and is considering job offers from two companies. Although the salary and insurance benefits are similar, the retirement programs are not. The other firm has a contributory plan that allows employees t..

  Customers to interact with your organization

Which of these key organizational behaviors helps customers to interact with your organization?

  About the operations of hancock company

The following information about the operations of Hancock Company is available. Find the NPV of its operating cycle. What is the new NPV if Hancock can delay the payments by 2 days and make the collections 2 days earlier? By comparing the answers to ..

  What is the value of this firm to its shareholders

The firm owes its bondholders $250,000. What is the value of this firm to its shareholders?

  The npv for upgrading to the new grill is closest to

Two years ago the Krusty Krab Restaurant purchased a grill for $50,000. The owner, Eugene Krabs, has learned that a new grill is available that will cook Krabby Patties twice as fast as the existing grill. If the Krusty Krab's opportunity cost of cap..

  Fraction of your money will be invested in risk-free bonds

You own some shares of Microsoft worth $1,000. Beta of Microsoft is 2. Microsoft currently has no debt. Microsoft decides to issue debt and buy back some of its stock in open market. Effectively, you want to undo the leverage of Microsoft. What fract..

  What do investors require as a rate of return on this stock

Consolidated Industries issued preferred stock 10 years ago. Assuming that the market is efficient, what do investors require as a rate of return on this stock?

  Market-derived real estate capitalization rates

What effect, if any, might an increase in the rate of return prospects in the stock or bond markets have on market-derived real estate capitalization rates? Can you think of circumstances that might cause a property’s market value to decline faster t..

  What is the net present value of assets depreciation

Your company plans to purchase equipment which is depreciable under Straight Line rates without any fraction of the year convention in the 10-year class (i.e. regardless of the month of purchase the whole year's value will be depreciated). The initia..

  Find the annual value of total construction

Using any Internet source, find the annual value (current dollars) of Total Construction Put in Place in the United States for the three most recent years as reported by the U.S. Census Bureau.

  Reimbursement methods and payment classification systems

Match the following reimbursement methods and payment classification systems with their definitions. PPS DRG RUG HHRG. The system used to pay for acute inpatient care that is based primarily on the patient's principal diagnosis. The system used to pa..

  What is the enterprise value-ebitda multiple for company

The market value of the equity of Thompson, Inc., is $599,000. The balance sheet shows $38,000 in cash and $209,000 in debt, while the income statement has EBIT of $110,000 and a total of $154,000 in depreciation and amortization. What is the enterpr..

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