What the pension fund should be to finance retirement

Assignment Help Corporate Finance
Reference no: EM13202200

We want to retire in 40 years, and we shall need $65,000 income per annum during our retirement which will last 35 years. We can save $60,000 annually during the first 9 years. We estimate that from year 6 till 10 we shall return to school for a graduate degree, which will cost $30,000 yearly in actual cash flow and opportunity cost expenses. Afterward, during years 27 to 40, our father will need nursing home care for twenty years. He has to give his house and $70,000 annually to the nursing home. Furthermore, we shall buy a yacht costing $150,000 in year 40. Additionally, we'll send our niece to college which will cost $70,000 for 4 years starting in year 16 from now. We would like to know what the pension fund should be to finance our retirement. Second, what annual savings should we accumulate from years 30 to 40 to be able to fund all the aforementioned expenses and our retirement.

Reference no: EM13202200

Questions Cloud

How many of each kind are there : Christina makes $9.25 purchase at a bookstore in Reno with a $20 bill. The store has no bills and gives her the change in quarters and dollar coins. There are 19 coins in all. How many of each kind are there?
What are the dimensions of the pen with the maximum area : I have 400 feet of fencing. I need to make a rectangular pen divided equally down the middle (both halves are equal). What are the dimensions of the pen with the maximum area?
Discuss the advantages and disadvantages regarding salary : Discuss the advantages and disadvantages regarding salary, office setup costs, work schedules, patient payment options, and malpractice insurance,.Conclude your analysis by choosing one of the options and explaining why you've done so.
How many had only a zoo membership : How many belonged to either one or the other or both?
What the pension fund should be to finance retirement : What the pension fund should be to finance our retirement. Second, what annual savings should we accumulate from years 30 to 40 to be able to fund all the aforementioned expenses and our retirement.
Express the area a of the rectangle as a function of x : A piece of wire 46 inches long is bent into the shape of a rectangle having width of x and length of y. Express the area A of the rectangle as a function of x.
What dimensions will produce the largest total area : a rancher has 216 feet of fencing to enclose two adjacent rectangular corrals. what dimensions will produce the largest total area?
Memo on managing working capital management : Writing A Memo on Managing Working Capital Management- prepare a brief memo for your boss
At what rate is his distance from second base decreasing : A baseball diamond is a square with side 90ft. A batter hits the ball and runs towards first base with a speed of 29 ft/s.

Reviews

Write a Review

 

Corporate Finance Questions & Answers

  Control of retirement investing

Explain what do you think Monica's idea of taking control of retirement investing and explain what is your opinion of Richard's contention that saving outside the pension was best?

  How would the accounts change

If Trans World stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

  Find the weighted average cost of capital

Find the weighted average cost of capital and if Company X wants to change its capital structure (i.e., lower its WACC), what should it do?

  Calculate the projects npv by discounting the relevant cash

Calculate the project's NPV by discounting the relevant cash flows (which include the initial up-front costs, the operating cash flows, and the terminal cash flows) at the company's cost of capital (WACC).

  Maintaining required debt or equity ratio

Red Company had a temporary fund squeeze near its balance sheet information. It required cash badly for a seasonal dip in sales.

  Prepare a common-sized income statement

Convert the vertical profit and loss account of the company into multi-step form to the extent possible and prepare a common-sized income statement.

  Define agency costs

Discuss and explain agency costs and describe whether these costs reduce business value.

  Find the interest expense

DNA Company issued $4000000 in 10.5%, 10-year bonds on February 1, 2010, at 104. With semiannual interest payment dates are January 31 and July 31. Apply the straight line method to solve the problem.

  Determine total transaction costs

Steve Bolten sold his sailboat for $225,000. He paid a sales commission of 10 percent to boat brokers, had legal fees of $500, & had additional selling costs of $1,000.

  Calculate the monthly car payments

You are planning buying a new, $15,000 car, & you have $2,000 to put toward a down payment. If you can negotiate a nominal yearly interest rate of 10% & finance the car over 60 months,

  Core factors for the success of bmw company

Review and consider what has made, & what sustains firm in success. What makes BMW a great company to work for, and to do business with? Choose and three  Core factors for the success of BMW company.

  Calculation of issue value of bond

Calculation of issue value of bond considering time value of money - Without doing the calculation would the value of the bond go up, go down or stay the same if the required interest rate increased to 12%. Explain

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