How much does the lottery company have to invest today

Assignment Help Financial Management
Reference no: EM132048518

You've just won the lottery which promises to pay you $3316 per month for the next 15 years, starting in one month. The lottery company is required to buy US Treasury securities to guarantee that it can meet its obligation to you.

If Treasury securities earn 3% APR, compounded monthly, how much does the lottery company have to invest today in Treasury bonds?

Reference no: EM132048518

Questions Cloud

Cost-cutting strategies-managers : Understanding organizational behavior has never been more important for managers. Because of the dramatic changes now taking place in organizations
Calculate the receivable turnover and the average days sales : Calculate the receivable turnover and the average days' sales uncollected for 20x4. Please include complete explanations for the calculations
Difference between master budget and flexible budget : For fixed manufacturing costs, the difference between the master budget and the flexible budget is equal to zero.
Prepare the journal entry necessary to record the sales : Saku Restaurant made credit card sales of $10 500. Prepare the journal entry necessary to record the sales using the "gross" method
How much does the lottery company have to invest today : If Treasury securities earn 3% APR, compounded monthly, how much does the lottery company have to invest today in Treasury bonds?
What was our budgeted revenue : What was our budgeted revenue? That is, what amount of revenue is included on the master budget?
What amount should your friend deposit every two weeks : What amount should your friend deposit every 2 weeks into the same type of account with same interest rate and compounding period.
Stocking moderately priced merchandise : What is the best way to introduce higher priced merchandise in a store known for stocking moderately priced merchandise?
What is the loss on early extinguishment : The bonds mature on 12/31/22. Straight-line amortization is used. If 30% of bonds are retired at 105 on January 1, 2019, what is loss on early extinguishment

Reviews

Write a Review

Financial Management Questions & Answers

  Manufacturing company purchased electrical services

A manufacturing company purchased electrical services for the next 5 years to be paid for with $70,000 now. The service after 5 years will be $15,000 per year beginning with the sixth year. After 2 years service the company, having surplus profits, r..

  Estimate the expected growth rate in earnings

Kenfront ltd is a firm that manufactures personal computers, Estimate the expected growth rate in earnings,

  Pay for equipment if the loan calls for semiannual payments

What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)?

  Retirement plan-what is rate of return on total invested

A publicly traded consulting engineering firm has a retirement plan wherein the company will match an employee’s stock purchases up to $ 5,000 per year, provided the employee has been with the firm for at least 10 years. If an employee hired 10 years..

  What is the arbitrage profit in one year

Suppose that the annual interest rate is 1.5% in the US and 3% in Germany, the spot exchange rate is $1.57/€ and the forward exchange rate with one-year maturity is $1.58 /€. Assume that an arbitrator can borrow up to $1,000,000 with €625,000. If an ..

  Current estimated value and growth rate

Last Year's Dividend (Do) $2.80. Growth rate for year 1 (g1) 25%. Current Estimated Value (Po) = If the stock was currently selling for $50, would you buy it yes or no?

  Cash conversion cycle-how much cash would be freed-up

Primrose Corp has $20 million of sales, $3 million of inventories, $2 million of receivables, and $1 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 9% rate. What is Primrose's cash c..

  Risk-level equivalent to that of overall market

Your portfolio has a beta of 1.23. The portfolio consists of 18 percent U.S. Treasury bills, 28 percent in stock A, and 54 percent in stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of stock B?

  Operating cash flow using the four different approaches

The tax rate is 35 percent. Calculate operating cash flow using the four different approaches.

  Determine the year-to-year percentage annual growth

Determine the target revenue figure, and explain why you do or do not feel that the company hit its target.

  What would be the cash collections forecast for june

The sales force at your company has developed the forecast for the next six months. The company typically collects 10% of sales in the current month as cash, 50% one month later, 37% two months later and has 3% bad debt. Based on this information, wh..

  Income and cash flow analysis

Income and Cash Flow Analysis The Berndt Corporation expects to have sales of $15 million. What is Berndt's expected net income?

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