A corporation has decided to provide the pension for key, Ask an Expert

Finance

A corporation has decided to provide a pension for a key employee who is scheduled to retire in 12 years (assume that today is January 1, 2000 and the employee will start their retirement on January 1, 2012). This pension is to provide a 20-year annuity for the employee with annual end-of-year payments of $65,000, with the first annuity payment being made on December 31, 2012. The company will fund this pension with 12 equal annual payments, with the first being made at the end of the year (December 31, 2000). The fund is expected to earn 5.5% each year for the next 12 years, afterwhich the fund is expected to earn 10% each year. What should the annual payments be in order to fund this pension? (Rounded to the nearest whole dollar)

a. $31,453

b. $32,012

c. $32,519

d. $33,772

e. $44,935

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9205164

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What methods will you use to effectively manage

What methods will you use to effectively manage expectations for a project. There are many different types of stakeholders on a project. Do their expectations differ? How can you work to ensure that the project does not ...

Uses of capm capital assets pricing modelconsider investing

(Uses of CAPM, Capital Assets Pricing Model) Consider investing in machinery that costs $ 1000 and generates in one year $ 1300, $ 1,100 or $ 900 with equal probability. The company is financed with $ 40,000 of debt and ...

Define and fully explain marketing research and the

Define and fully explain marketing research and the marketing concept and describe the relationship between marketing research and the marketing concept.

Kiessling corp pays a constant 9 dividend on its stock the

Kiessling Corp. pays a constant $9 dividend on its stock. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required return on this stock is 11 percent, ...

A 36-year maturity bond with par value 1000 makes

A 36-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 14%. What is the EQUIVALENT annual yield to maturity of the bond if the bond sells for $1,080? A 31-year maturity, 9.5% ...

Capital budgeting problem - npv amp taxobunkem

Capital Budgeting Problem - NPV & Tax Obunkem Manufacturing - a producer of Computer & Accessories is considering setting up a new production plant at its location in Pretoria, South Africa at the cost of $32, 400 millio ...

You are considering an investment in a mutual fund with a 5

You are considering an investment in a mutual fund with a 5% front-end load and an expense ratio of 1.35%. You can invest instead in a bank CD paying 7% interest. a. If you plan to invest for six years, what annual rate ...

Explain how the company newmans own brand fulfills the

Explain how the company Newman's Own brand fulfills the definition of a business for profit and a non-profit business at the same time. Consider in the response the functions of business, entrepreneurship and production ...

You invested 12000 in a stock that has an expected return

You invested $12,000 in a stock that has an expected return of 18% and $21,000 in a stock with an expected return of 10%. What is the portfolio's expected return?

A foreign trader at the banks tx desk calls to inform you

A Foreign trader at the bank's TX desk calls to inform you that the company TD Bank is quoting $1.20/€1, and Bank of America is offering $1.40/£1. The trader also noticed thatCredit Z is also making the market in pound ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert