Our Services

Get 15% Discount on your First Order

[rank_math_breadcrumb]

Time Value of Money

Competency

Determine current values of cash streams utilizing discounted cash flow techniques.

Student Success Criteria

View the grading rubric for this deliverable by selecting the “This item is graded with a rubric” link, which is located in the Details & Information pane.

Scenario

You are currently a benefits analyst within Book Bliss Company, a small family-owned corporation that manufactures magnetic bookmarks. Currently, the members of management have been funding their own retirement plans, and it has begun to be costly and not commensurate with their salaries. Book Bliss management would like to provide a contributory pension plan for five current members of the management team.

Management believes they can afford to invest $10,000 per month for the next 10 years. They anticipate the rate of return will be 12%. At the end of the 10 years, they expect retiring employees to start withdrawing from this pension plan. The anticipated longevity after retirement is expected to be 20 years, and management believes the rate of return on the investment to continue through the 20 years of retirement payout.

Management is not knowledgeable about the time value of money and why it makes a difference if a dollar is invested today versus in 20 years. Management has requested your assistance in determining relevant pension plan values so they can finalize the components of the pension plan.

Instructions

Using the following Excel template, develop a spreadsheet that covers the following:

Module 5 Time Value of Money Template.xlsx

  • Explain the concept of the time value of money, including the present and future value of $1 and the present and future value of an annuity. Explain the difference between the annuity payment at the beginning and the end of the period.
  • Demonstrate the future value of the monthly cash investments for the next 10 years, given the investment earns the projected 12% annual return.
  • Calculate the total monthly payment that can be withdrawn from the investment over 20 years, given the anticipated 12% annual rate of return continues to be met through the 20 years of retirement. Provide management with the monthly payment amount that will be available to pay out in monthly pension amounts.
  • Assuming all five members of management will receive the same monthly annuity payment, provide management with the proposed monthly retirement payment that can be offered to these five members of management.
  • Use the built-in cash flow functions in Excel to perform all calculations, explaining the values you entered for the function in the adjacent cells.
Assessment Requirements/Submission Requirement:
  • Excel Template

A – 4 – Mastery

Accurate and robust explanation of Time Value Money. Highly accurate annuity payment calculation.

A – 4 – Mastery

Presentation accurately projects rate of return.

A – 4 – Mastery

Presentation accurately projects rate of payout for employees

A – 4 – Mastery

Presentation accurately projects rate of payout for management

A – 4 – Mastery

Accurate Excel calculations and clear and articulate explanations of values.

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Module 1 project 1 IDS-104

Please see attachment below Module One Short Paper Guidelines and Rubric.html IDS 104 Module One Short Paper Guidelines and Rubric Overview Digital communities are everywhere, from social media groups and online learning forums to gaming and hobby-based platforms. These spaces bring people together with shared interests, goals, or experiences, and

Module 1 Project 1

Please see attachment below for assignment details. Module One Short Answer Assignment Guidelines and Rubric.html HUM 102 Module One Short Answer Assignment Guidelines and Rubric Overview Creative works help us make sense of the world around us. This assignment will allow you to explore how creative works from the subject

Computer Applications in Accounting

image4.png image5.png image6.png image7.png image8.png image9.png image10.png image11.png image12.png image13.png image14.png image15.png image16.png image17.png image18.png image19.png image20.png image21.png image22.png image23.png image24.png image25.png image26.png image27.png image28.png image1.png image2.png image3.png

Case Study

   Your city is encouraging the use of reusable, eco-friendly water bottles to cut down on plastic waste. In the current local market, a reusable bottle sells for about $5, and each month about 10,000 bottles are sold. Surveys show some consumers are willing to pay up to $8 for

Business & Finance HOMEWORK

· Principles and Practices of Management and Organizational Behavior, 1st Edition By: Chandrani Singh and Aditi Khatri ISBN: 978-1-03-263424-1

Reading 8

Instructions and readings attached  For section #2 Comparative Insight (7 points) I also attached week 7 reading (Reading_Interviewing Candidates-1.pdf) 

HR 2

Instructions and readings are attached.  Note: You don’t have to create the video. Just write a script (1-3 mins)  

ethics

BUSI 301 Discussion Assignment Instructions Overview Discussions bring dialogue and communication into our learning experience. Unlike so much of the unsubstantiated opinion we see in the public square and social media, these discussions provide a space for in-depth analysis and application of the topics in our Learn readings and presentations.

Unit VI

see attached You have been hired at ABC Manufacturing, and you have been asked to work on the budget for the upcoming year regarding labor costs and the number of employees needed. Complete the Unit VI Assignment Template for this assignment and submit it for grading in Blackboard.

Odoo

  What is Odoo implementation? Odoo implementation Odoo implementation is the process of setting up and configuring the Odoo ERP system to match a company’s specific business needs. It involves analyzing workflows, customizing modules, migrating data, and integrating various departments like sales, inventory, HR, and accounting into a single unified

Heed wk 3

Global Regulatory and Legal Requirements of Quality.v1 17a Study Guide- Pathway to Medical Device Approval Part 1 1. Which branch of FDA Approves Medical Device products? 2. The Approval Pathway is Based on Device Risk. Fill in the following table: Medical Device Risk Classification Classification Define Examples Class I Class

Sam Strother and Shawna Tibbs

   Sam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle Insurance Company and co-directors of the company’s pension fund management division. An important new client, the North-Western Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and

P1

Procurement Management Plan Instructions This week, you will produce your Procurement Management Plan for your project. Your plan will provide direction to manage procurement throughout the life of your project. The plan recognizes and describes the products and/or services to be acquired, the types of contracts to be used to

Mathematical accounting

A company produces and sells a single product. The fixed costs amount to $50,000 per month, and the variable cost per unit is $25. The product is sold for **$40 per unit**. **Required:** 1. Calculate the **break-even point** in units and in dollars. 2. Determine the **profit or loss** if

Accounting

Discuss advantages of monetary policies in business laws.

Business Finance – Accounting HOMEWORK

see attached Use this reference for first 2 questions. Williams, J., Bettner, M., & Smith, K. (2023). Financial & Managerial Accounting (eBook with Connect access). New York, NY: McGraw-Hill Education. Homework 1, 1 page with 2 references: Select a publicly traded company and access the company’s most recent annual report