Summer camp for kids with the average expenses

Assignment Help Financial Management
Reference no: EM131048623

Pat Davis runs a summer camp for kids with the average expenses in each month as shown below. The camp uses a savings account for all funds that pays interest of 1.00% nominal annual rate with monthly compounding. Pat is getting older and wants to fund the camp in perpetuity by investing in a fund that earns 6% NAR compounded monthly. A single amount is to paid out of the fund each year to cover the year's expenses. How much would have to be in the fund?

Month Expenses Jan $5,000 Feb $5,000 Mar $5,000 Apr $10,000 May $10,000 Jun $25,000 Jul $40,000 Aug $35,000 Sep $10,000 Oct $5,000 Nov $5,000 Dec $5,000 s

Reference no: EM131048623

Questions Cloud

Willing to pay to avoid the uncertainty of the gamble : Recall the St. Petersburg game. It starts at $2. Toss a coin and if a head appears, thepot doubles. If tails appears, you win the pot at that time and thegame ends.So, if you get H, H, H T, you win $16. The payoff table is,
Estimate average annual household expenditure in each age : Estimate average annual household expenditure in each  age  group  of  household  head taking into account the average number of people in the household and the US Department of Commerce (DOC) equivalence scales
First payment occurring at lease inception : Your firm is considering leasing a magic box. The lease lasts for three years. The lease calls for three payments of $1,350 per year with the first payment occurring at lease inception. The magic box would cost $3,600 to buy and would be straight-lin..
The potential adoption of flat-rate tax structure : There are a number of taxation rate structures in use in various countries in the world. For citizens residing in the United States, a progressive tax rate structure is applicable presently. Write a report comparing the advantages and disadvantages o..
Summer camp for kids with the average expenses : Pat Davis runs a summer camp for kids with the average expenses in each month as shown below. The camp uses a savings account for all funds that pays interest of 1.00% nominal annual rate with monthly compounding. Pat is getting older and wants to fu..
A relationship between gender and attending school : To estimate the average length of time spent in Barbados by long stay tourists, 150 immigration records were reviewed. The sample produced a mean stay of 8.8 days, with a standard deviation of 6 days.
Four investments-annually in mutual fund : You invest $3,000 annually in a mutual fund that earns 11 percent annually, and you reinvest all distributions. How much will you have in the account at the end of 15 years? You invest $3,000 annually in a mutual fund with a 4 percent load fee so tha..
A program that repeatedly asks the user to enter two money : To add the two amounts, you'll need to carry 1 shilling when the pence value is greater than 11, and carry 1 pound when there are more than 19 shillings.
Identify and explain the role of a specifc tourism : Identify what is actually occuring or being practised at a place, and relate this to the theoretical concepts introduced in this unit - identify and explain the role of a specifc tourism or hospitality industry in your TDR

Reviews

Write a Review

Financial Management Questions & Answers

  Assumes that inflation rate is running

You deposit a sum of $10,000 today in your bank safe deposit box and leave it there. You learn nothing in your bank account as the money is sitting inside the safe deposit box. Assumes that inflation rate is running at 14% a year. How much will your ..

  Executed mortgage of blackacre to secure

Marcia executed a mortgage of Blackacre to secure her indebtedness to Ajax Savings and Loan Association in the amount of $125,000. Later, Marcia sold Blackacre to Morton. The deed contained the following provision: “This deed is subject to the mortga..

  Net revenues in excess of expenses

Community Hospital is a nonprofit, general acute-care hospital located in a wealthy suburb of City. Last year, it reported revenues of $100 million, and a “profit” (net revenues in excess of expenses) of $12 million.  The cost (essentially the pro-ra..

  Capital gains associated with disposal of the equipment

Equipment costing $20,000 that is a MACRS 3-year property is disposed of during the second year for $12,000. Calculate any depreciation recapture, ordinary losses, or capital gains associated with disposal of the equipment.

  Cost of carrying silver includes storage costs

Assume that the cost of carrying silver includes storage costs. On March 17, 2015 the May 2015 futures contract settled at $ 15.578 per ounce (assume it is a 2-month contract), spot traded at $ 15.562 per ounce. Storage costs per ounce are about 0.2%..

  Retirement fund that earns interest compounded daily

Emily Dorsey's current salary is 85000 per year and she is planning to retire 17 years from now. She anticipated that her annual salary will increase by 4000 each year (85000 the first year, 89000 the second, 93000 the third year, and s forth) and sh..

  Calculate the value of the firm

Calculate the value of the firm and analysts now expect that dividends will grow annually by 3%. Calculate the firm value."

  What is the target stock price in one year

Fly Away, Inc., has balance sheet equity of $5.3 million. At the same time, the income statement shows net income of $763,200. The company paid dividends of $431,208 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 17, what i..

  What other decisions can capital budget techniques

In addition to project selection, what other decisions can capital budget techniques help managers with?

  How much will you pay for the companys stock today

Caan Corporation will pay a $2.78 per share dividend next year. The company pledges to increase its dividend by 4.5 percent per year indefinitely. If you require a return of 15 percent on your investment, how much will you pay for the company’s stock..

  Find the future value of the annuities

If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? 4-2 What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually? 4-12 F..

  What determines the intrinsic value of financial security

What determines the intrinsic value of a financial security (ie. a stock, bond, etc)? - How is the intrinsic value arrived at? (ie. What kind of assumptions are required?) - How do we explain why analysts can come up with different valuations for the..

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