Future value of ordinary annuity investment

Reference no: EM1327716

You were selected as the new Chief Executive Officer of OHC Medical Center, a 600-bed hospital in the suburbs of a city with a population of over 1.5 million. The hospital board recently decided to investigate ways to increase revenues. The facility has the benefit of different revenue streams including patient revenue and money from investments.

The hospital recently sold property for $100,000. The hospital board wants to invest $50,000 at 5% in an ordinary annuity and receive annual payments of 10,000 over the next five years. What is the future value of this ordinary annuity investment?

The board is considering other options for investing the remaining money. They want to double their investment of $50,000 over the next 10 years by using conventional securities with a projected return of 8%. Does the present value of the investment indicate that this is possible?

What is the future value of this ordinary annuity investment?
Does the present value of the investment indicate that this is possible?
Your job is to provide an answer to both questions.

Restate the scenario in your response
Identify the key components (PV, FV, i, n)
Present the results as part of your response to these questions.

Reference no: EM1327716

Questions Cloud

Calculate present value of future payment : Compute the present value of a payment of $1,075 you would received for 10 years if the interest rate is 5%. Compute the present value of a payment of $875 you would received for 15 years if the interest rate is 5%.

One parameter sensitivity analysis : The Smith family annual reunion is to be held on the first Saturday in May. There is a probability of cool or rainy weather on that day. The family has reserved free space at a local park for their event.

Explain how does the selection of sap modules change : How does the selection of SAP modules change the overall implementation project as defined in the ASAP methodology?

Manager-s leadership style influence effectiveness : How does a manager's leadership style influence his or her effectiveness in the workplace? Provide a specific example.

Future value of ordinary annuity investment : What is the future value of this ordinary annuity investment? Does the present value of the investment indicate that this is possible? Your job is to provide an answer to both questions.

The interpersonal relationships in the workplace important : Why are interpersonal relationships in the workplace important?

Plan an algorithm that finds k smallest numbers : plan an algorithm that finds k smallest numbers of the whole G sorted in ascending order and has time complexity O(m*lg(m)) and spatial complexity O(m).

Training needs assessment : Training needs assessment - Explain the problem and examine the needs (using the analyses above)

Calculating present values of cash flows : You can purchase property today for $3.3 million and sell it in 5 years for $4.3 million. (You earn no rental income on the property.)

User Account

All Pages