1

# Daryl Kearns saved \$220,000 during the 25 years that he worked for a major corporation. Now...

## Question

###### Daryl Kearns saved \$220,000 during the 25 years that he worked for a major corporation. Now...

Daryl Kearns saved \$220,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of \$190,500. The following table presents the estimated cash inflows for the two alternatives: Opportunity 1 Opportunity # 2 Year 1 \$ 55,665 1 04,200 Year 2 \$ 58,930 109,480 Year 3 \$78,810 17,500 Year 4 5101,320 15,800 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate; it is 12 percent. (PV of S1 and PVA of \$1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity, which should Mr Kearns adopt based on the net present value approach b. Compute the payback period for each opportunity. Which should Mr Kearns adopt based on the payback approach? Complete this question by entering your answers in the tabs below.
Saved Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? (Round your intermediate calculations and final answer to two decimal places.) Net Present Value Opportunity 1 Opportunity 2 Which opportunity should be chosen? Required B >
Complete this question by entering your answers in the tabs below. Required A Required B Compute the payback period for each opportunity. Which should Mr. Kearns adopt based on the payback approach? 03:25:43 Payback Period Kipped Opportunity 1 Opportunity 2 Which opportunity should be chosen? Book Print < Required A erences

#### Similar Solved Questions

##### How do you express #1/(x^3 +4x)# in partial fractions?
How do you express #1/(x^3 +4x)# in partial fractions?...
##### Rita Company buys merchandise on account from Linus Company for \$590. Rita sells the goods to...
Rita Company buys merchandise on account from Linus Company for \$590. Rita sells the goods to Ellis for \$900 cash. Use a tabular summary to record the transactions for Rita Company using a perpetual inventory system...
##### Which industries would find benefit in using job-order costing, and what are the benefits of tracking...
Which industries would find benefit in using job-order costing, and what are the benefits of tracking of all the costs that go into a product or service?...
##### (1 pts) 6. What is the number of board feet for the following: 100 each 2"x...
(1 pts) 6. What is the number of board feet for the following: 100 each 2"x 4 "x 10'-0" a) 780 b) 667 c) 600 d) 1000 I 7. The raise and the span of a roof is 10' and 60' respectively, the run and the length of rafter are: (1 pts) a) 5' and 36 b) 30' and 31.65' c) ...
##### 6. (6 points) Which of the following statements is correct for electromagnetic waves: A. The magnetic...
6. (6 points) Which of the following statements is correct for electromagnetic waves: A. The magnetic field vector (B) is always parallel to the electric field vector (E) B. B is always perpendicular to E C. The angle between B and E is always 45° D. Direction of B is not linked anyhow to the di...
##### Describe the enormity and complexity of medicine in the United States.
Describe the enormity and complexity of medicine in the United States....
##### For TiSO, Ksp = 3.6.10-6. What is solubility of Tl2SO4 in pure water? 1.9-10-3M 4.2-10-3M 3.6...
For TiSO, Ksp = 3.6.10-6. What is solubility of Tl2SO4 in pure water? 1.9-10-3M 4.2-10-3M 3.6 10-4M 9.7 10-3 M...
##### The International Space Station whose mass is 420 tons is orbiting at an altitude of about...
The International Space Station whose mass is 420 tons is orbiting at an altitude of about 400 km above the earth's surface. The mass of the earth is 5.976 × 102 4 kg and the radius of the earth is 6.378 × 106 m. (a) What is the gravitational force exerted on the Space Station by the...
##### A group containing c cats and d dogs is lined up in random order; that is,...
A group containing c cats and d dogs is lined up in random order; that is, cach of the (cd)! permutations is assumed equally likely. What is the probability that the animal in the ith position, 1<i<d + c, is a dog?...
##### Calculate the pH of a solution made by dissolving solid MES (“HA”) in water to a...
Calculate the pH of a solution made by dissolving solid MES (“HA”) in water to a concentration of 0.0500 M. Calculate the ionic strength of this solution. Please explain and show all steps!...
##### Which of the following are true when comparing TCP/IP to the OSI Reference Model? (Choose two.)...
Which of the following are true when comparing TCP/IP to the OSI Reference Model? (Choose two.) A. The TCP/IP model has seven layers, while the OSI model has only four layers. B. The TCP/IP model has four layers, while the OSI model has seven layers. C. The TCP/IP Application layer maps to the Appli...
##### Problem 2 (12p) The Shamrock Dogfood Company (SDC) has consistently paid out 40% of its earnings...
Problem 2 (12p) The Shamrock Dogfood Company (SDC) has consistently paid out 40% of its earnings in dividends. (a) The company's return on equity is 16%.What would you estimate as its dividend growth rate? (b) Given the low risk in dog food, your required return on SDC is 13%.What P/E ratio woul...
##### Normal No Spacing Heading Heading 2 Title The table shows the results of a survey of...
Normal No Spacing Heading Heading 2 Title The table shows the results of a survey of 100 authors by a publishing company. New Authors Established Authors Total Successful 5 25 30 Unsuccessful 10 60 70 100 Total 15 85 Compute the following conditional probability. An author is established, given that...
##### . What analysis will you ask your epidemiologist to conduct so that you will be able...
. What analysis will you ask your epidemiologist to conduct so that you will be able to prepare a more accurate staffing plan for the upcoming flu season...
##### The figure shows a block slides along a frictionless track from point a to polut b....
The figure shows a block slides along a frictionless track from point a to polut b. The work (W) done on the box by the gravitational force during the motion is (Wy: work during the path 1, Wz: work during the path 2) 1 Select one: a. W, > W2 b. W2>W c. W. = W2 d. none of all...
##### The data represent the number of driving fatalities for a certain area by age for male...
The data represent the number of driving fatalities for a certain area by age for male and female drivers. Male Female under 16 258 126 16-20 5225 2366 21-34 12,016 4704 35.54 10,191 4593 55.69 4591 1631 70 and over 3380 1258 (a) What is the probability that a randomly selected driver fatality who w...