What is the monthly return on this investment vehicle

Assignment Help Financial Management
Reference no: EM131022906

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,250 monthly. The contract currently sells for $110,000.

What is the monthly return on this investment vehicle? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Monthly return % per month What is the APR? (Do not round intermediate calculations.

Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) APR % What is the effective annual return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective annual return.

Reference no: EM131022906

Questions Cloud

Different possible interpretations of the concept : Discuss different possible interpretations of the concept of a group, and how these may relate to differences in styles of corporate governance and of company financing.
Explain socrates response to meletus accusation : Explain Socrates' response to Meletus' accusation that he corrupts the youth. Is Socrates' response adequate? Why or why not?
Analyze the domestic and international opportunities : The Entrepreneur's role is to protect business Ideas and related Legal Issues, briefly Identify and Analyze the Domestic and International Opportunities of a 5000 inc multinational corporation.
Summarize the movements in the yuan-dollar exchange rate : Go to the Web site of the Federal Reserve Bank of St. Louis Federal Reserve (FRED) (research.stlouisfed.org/fred2/) and find the values for the China/U.S. Foreign Exchange Rate (DEXCHUS) from 1981 to the most recent date available. Compared with i..
What is the monthly return on this investment vehicle : Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,250 monthly. The contract currently sells for $110,000. What is the monthly return on this investment vehicle? What is the effective annual return?
Identify the violations on the individual involved : Identify the violations on the individual involved, as well as the weakness of the oversight of the organization in which the unethical incident occurred.
What price of big mac in each country in terms of us dollar : Assuming no transportation costs and a no-cost means of preserving Big Macs while they are being transported, explain in which county you would want to purchase a Big Mac and in which country you would want to sell the same Big Mac in order to make..
Influences of anglo-saxon accounting-continental european : Compare the importance of the influences of Anglo-Saxon accounting and continental European accounting in Eastern Europe and in China during the 1990s.
Five basic methods of payment for international trade : In 250 words, consider the five basic methods of payment for international trade. Describe the pros and cons of each. Please read full description.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the wacc for martin industries given

A tax rate of 34%, the market return is 13.2% and the risk-free rate is 4.5%. 7,500 preferred stock shares selling at $88/share with a 6% dividend rate. 265,000 common shares outstanding selling for $76/share. The dividend is expected to grow by 4% p..

  Intends to make its first dividend payment

Hayden Ltd intends to make its first dividend payment 5 years(s) from now. It then intends to pay dividends annually thereafter. The company has announced it expects the first three dividends to all be of the magnitude of around 5 cents per share.

  What is the annual ocf for the project

Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $26,400, and the company expects to sell 1,500 per year. The company currently sells 1,850 units of its existing model per year..

  What is the free cash flow from the project in year one

A new project is expected to generate $800,000 in revenues, $250,000 in cash operating expenses, and depreciation expense of $150,000 in each year of its 10-year life. The corporation's tax rate is 35%. What is the free cash flow from the project in ..

  Calculate NPV and MIRR of pulley project

When considering including two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $17,400, and that for the pulley system is $20,200.

  What split ratio would it need to bring its stock price

The below must be calculated and presented in excel. Berkshire Hathaway's A shares are trading at $120,000. What split ratio would it need to bring its stock price down to $50?

  Calculate the accounting break-even point

Evaluate project that costs $1.5 million has a 10-year life and no salvage value. Assume depreciation is straight line over the life of the project. Sales are projected at 150K units every year over the life of the project. Price per unit is $75, var..

  Whats one way she might be able to obtain bank credit card

A year after declaring bankruptcy and moving with her daughter back into her parents' home, Nancy Silbermann is about to get a degree in nursing. As she starts out in a new career, she also wants to begin a new life. In addition to opening checking a..

  After tax cost of capital to walgreen for the bonds

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value bonds with a 15 year maturity at a price of $953 that carries a coupon interest rate of 12.6 percent that ..

  Define capital asset pricing model and define beta

(Calculating the rate of return) A friend promises to pay you $600 three years from now if you loan her $500 today. What interest rate is your friend offering you? (Calculating the future value of an annuity). Define the Capital Asset Pricing Model (..

  Exposition a fee for the marketing value of the opportunity

Great Lakes Clinic has been asked to provide exclusive healthcare services for next year's World Exposition. The clinic manager’s wanted to conduct a financial analysis of the project. An up-front cost of $160,000 is needed to get the clinic in opera..

  Calculate the expected return for the two stocks

Consider the following information: Rate of Return if State Occurs State of Probability of State Economy of Economy Stock A Stock B Recession .24 .055 –.44 Normal .64 .135 .34 Boom .12 .330 .57 Requirement 1: Calculate the expected return for the two..

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