Question how much will your corporation have accumulated in, Ask an Expert

Finance

Question: How much will your corporation have accumulated in a trust funds account for its retired employees at the end of 20 years from now, if it deposits $20,000 at the beginning of the first year, and $5,000 at the end of each year thereafter, with the last deposit made at the end of the 20th year? Assume the firm can earn a sure 6% annual interest rate (return) on the deposited money.

1) Show a complete timeline of the cash flows. Please, interpret the deposit of the $5,000 as occuring at the end of each of the other year thereafter -- that is beginning at the end of year 2, as discussed in class.

2) Calculate the Future Value of all of the cash flows at the end of year 20.

3) Use the long method (yes, this is tedious!!) by finding the FV of each cash flow to T=20, individually and then add together all the calculated future values.

4) Then, use TVM shortcut formulas to verify your result in 3).

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92841962

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Thsi estimates that a project will initially cost 523

THSI estimates that a project will initially cost $5.23 million to setup and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total ...

A firm is considering a project that has the following

A firm is considering a project that has the following estimated cashflows: Increased sales to business of $100,000 for the next six years (starting in one year's time) Increased costs of $30,000 for the next six years ( ...

Please show all work use of formula etcyou have just joined

Please show all work (use of formula, etc) You have just joined the investment banking firm of Danny, Chatman, and Howard. They have offered you two different salary arrangements. You can have $80,000 per year for the ne ...

The statement of retained earnings for redwood systems ltd

The statement of retained earnings for Redwood Systems Ltd. shows a retained earnings balance of $300 million on December 31. During the year, Redwood generated net income of $60 million and paid dividends of $20 million ...

Determine the operating cash flow ocf for kleczka llc based

Determine the operating cash flow? (OCF) for? Kleczka, LLC., based on the following data. During the year the firm had sales of $2,548,000?, cost of goods sold totaled $1,802,000?, operating expenses totaled $320,000?, a ...

Tick the factors that financial manager should be included

Tick the factors that financial manager should be included when computing the incremental free cash flows of an investment decision. Sunk costs Opportunity costs Project externalities Financing costs

Use the following datadown payment to finance vehicle 4000

Use the following data: Down payment (to finance vehicle) $4,000 Down payment for lease$1,200 Monthly loan payment $560 Monthly lease payment $440 Length of loan 48 months Length of lease payment 48 months Value of veh ...

You were offered to purchase a stock that paid a 200

You were offered to purchase a stock that paid a $2.00 dividend yesterday. You expect the dividend to grow at a rate of 5% per year into a perpetuity. If the appropriate rate of return for the stock is 11%, what is the m ...

What are some alternative methods that can help teach

What are some alternative methods that can help teach companies about the culture of where they want to do business before they make the move?

The firm has bonds that pay a 5 coupon rate mature in 10

The firm has bonds that pay a 5% coupon rate, mature in 10 years and sell for $975. The preferred stock is selling for $35 and pays a $3.00 dividend. The common stock is selling for $20, just paid a $2.25 dividend and is ...

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