Ask Question, Ask an Expert


Ask Financial Accounting Expert

problem1. Eleanor requires $40,000 a year to live on in retirement net of the income she will get. She will be retiring in 22 years and is funding for 25-year retirement. The inflation rate is anticipated to be 3.5 percent a year and the after-tax return on her investments percent.

a. How much will the short fall amount to at beginning of retirement period?

b. What lump sum will she need at beginning of retirement period?

c. What is the required annual savings?

problem2. Frank, age 28, wants to compute his resources in real (inflation-adjusted) terms. find out the amount of resources made accessible by age 65 retirements if $18,000 a year is saved. Suppose that outflows from ages 65 to 90 are at the rate of $27,000 a year. The projected inflation rate is 4 percent, and the expected investment return is 6 percent.

a. How much in new savings will Frank have accessible at age 65 before subsequent withdrawals?

b. How much will he have left at an age 90?

c. What is the present value of that sum at an age 65?

d. How much will he have to save per year to exactly meet his requirements?

. The smiths had $110,000 in savings at age 51. They had a desired retirement age of 65. They desire to fund through age 92. Suppose a 4 percent inflation rate and a 5 percent after-tax rate for investment both pre- and postretirement. They have household income of $140,000, which is rising at the rate of inflation. Their expenditures consisting of taxes are $125,000 a year. They estimate that in retirement they will get $28,000 a year together in Social Security and Mr. Smith will receive a $12,000-a-year pension, both in today’s dollars. Their retirement expenses would be $90,000 a year in today’s dollars.

1. find out:

a. The lump sum needed at retirement.

b. Current assets available at retirement

c. Annual savings required.

d. The differentiation between needs and resources.

2. Analysis:

a. Is their retirement plan attainable as is?

b. If not, what are the alternatives which could help reconcile needs and resources?

c. What is your recommendation?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93292
  • Price:- $70

Priced at Now at $70, Verified Solution

Have any Question? 

Related Questions in Financial Accounting

Assignemntpart 1 the following information is available for

Assignemnt PART 1: The following information is available for GFI's maintenance cost over the last seven months. Use the high low method to estimate the fixed and variable components of its maintenance cost. Would this b ...

Course projectfinancial statement analysislearning

COURSE PROJECT FINANCIAL STATEMENT ANALYSIS Learning Objectives • Analyze a company's financial statements in terms of liquidity, profitability and long-term solvency, and cash flows from operations. • Prepare in good fo ...

The finance or accounting director has asked you to report

The finance or accounting director has asked you to report on the funds and financial status of your government entity (pretend he or she is your boss). Your boss will present the information to various users, so current ...

Determine how you would segment the market to conduct

Determine how you would segment the market to conduct research for the health care product or service you found. Explain your rationale. Referring to the same health care product or service, determine the most effective ...

Assignmentjohns house painting company has the following

Assignment John's House Painting Company has the following transactions for the year 1. December 1 - Issued capital stock for $100,000 to start a house painting business. 2. December 1 - Paid one year insurance premium c ...

On december 31 2009 adams corporation acquired all of the

On December 31, 2009, Adams corporation acquired all of the stock of Baker company. the fair value of Adam's shares used in the exchange was $7,500,000. At the time of acquisition, the book value of Baker's stockholder's ...

Discussionanswer in 2-3 paragraphs and use

DISCUSSION ANSWER IN 2-3 PARAGRAPHS AND USE SCHOLARLY SOURCE(S) First, search the internet for the official website of your local city government. If you cannot find your city, select your state. After reviewing this web ...

Assignmentfinancial statement analysisprepare an eight- to

Assignment Financial Statement Analysis Prepare an eight- to ten-page fundamental financial analysis (excluding appendices, title page, abstract, and references page) that will cover each of the following broad areas bas ...

I correction of improper cost entries plant acquisitions

I. (Correction of Improper Cost Entries) Plant acquisitions for selected companies are presented below. 1. Protex Inc acquired land, buildings, and equipment from a bankrupt company, for a lump-sum price of $700,000. At ...

James investor corporation acquires 25 of the common shares

James (investor) Corporation acquires 25% of the common shares of Heck (investee) Company for $350,000 on January 1, 2014. For 2014, Heck reports net income of $50,000 and paid dividends of $16,000. Instructions (a) Prep ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro