# Finance 330

Satisfactory Essays
Chapter 5 Case
Funding Jill Moran’s Retirement Annuity
Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms. Moran, by contract, will retire at the end of exactly 12 years. Upon retirement, she is entitled to receive an annual end-of-year payment of \$42,000 for exactly 20 years. If she dies prior to the end of the 20-year period, the annual payments will pass to her heirs. During the 12-year “accumulation period,” Sunrise wishes to fund the annuity by making equal, annual, end-of-year deposits into an account earning 9% interest. Once the 20-year “distribution period” begins, Sunrise plans to move the accumulated monies into an account earning a guaranteed 12% per year. At the end of the distribution period, the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and that the first distribution payment will be received at the end of year 13.
To Do:
a. Draw a time line depicting all of the cash flows associated with Sunrise’s view of the retirement annuity.
b. How large a sum must Sunrise accumulate by the end of year 12 to provide the 20-year, \$42,000 annuity?
c. How large must Sunrise’s equal, annual, end-of-year deposits into the account be over the 12-year accumulation period to fund fully Ms. Moran’s retirement annuity?
d. How much would Sunrise have to deposit annually during the accumulation period if it could earn 10% rather than 9% during the accumulation period?
e. How much would Sunrise have to deposit annually during the accumulation period if Ms. Moran’s retirement annuity were a perpetuity and all other terms were the same as initially

## You May Also Find These Documents Helpful

• Good Essays

UMUC Economics and Finance Department FINC 330 Business Finance Semester: Summer 2011 Instructor: Dr. Emmanuel Anoruo Instructions: 1. Answer only 15 questions 2. Show all work 1) Given the financial data for New Electronic World, Inc. (NEW), compute the following measures of cash flows for the NEW for the year ended December 31, 2005 (a) Operating Cash Flow. (b) Free Cash Flow. For the year ended December 31, EBIT + DEPR – TAXES 30000+3000-8000= 25000…

• 816 Words
• 4 Pages
Good Essays
• Satisfactory Essays

BIO 330 Exam 1 Lecture 1 * The oldest shell middens from South Africa have been dated in 140,000 years old * Modern science is based on the application of the scientific method Lecture 2 * In the middle, ascending mantle material makes a mid ocean ridge * In areas where two continents are pushing against each other, one sinks underneath the other producing subduction zones that create deep trenches * Solid water (ice) displaces more volume than liquid water, therefore it floats…

• 1111 Words
• 5 Pages
Satisfactory Essays
• Powerful Essays

CJUS 330: Judicial Process: Chapter 1: Courts, Crime, and Controversy: Criminal Justice System: the numerous public agencies involved in implementing public policy concerning crime. Dual Court System: Separate state and federal courts. Federal Court: State Court: Supreme Court of ◄ Appellate Court of last the United States resort (Supreme Court) ▲ ▲ Circuit Courts of Intermediate Courts of Appeals Appeals (in 39 states) ▲…

• 2002 Words
• 7 Pages
Powerful Essays
• Satisfactory Essays

MGT 320 Study Guide for Exam 1 FALL 2013 EXAM STRUCTURE (Closed-Book Exam, No Notes) – 120 POINTS QUESTIONS (MULTIPLE-CHOICE, TRUE-FALSE, SHORT ANSWER) KINICKI-FUGATE BOOK (Chapters 1-4) Kinicki-Fugate- Chapter 1: Needed: People-Centered Managers and Workplaces 1. What are the seven people-centered practices according to Jeffrey Pfeffer (Stanford University)? (p. 4) 1. Job Security 2. Careful Hiring 3. Power to The People 4. Exceptional pay for performance 5. Lots of Training…

• 3306 Words
• 14 Pages
Satisfactory Essays
• Powerful Essays

Management Practices of Marine Corps Recruit Training Anthony Glenn II Mgt-330 Management for Organizations Prof. David Gibbons May 30, 2013 Management Practices of Marine Corps Recruit Training Marine Corps recruit training is organized specifically to make Marines who are committed to the institutions core values of honor courage and commitment in service to the country. Recruit training is organized by Regiment; within the Regiment there are several components such as Battalion, Company…

• 3509 Words
• 15 Pages
Powerful Essays
• Good Essays

recorded in the appropriate box overleaf. The person who observed / witnessed your activity must sign and date overleaf. Links to Date of activity: Links to Unit ref Element ref PC ref Performance evidence Scope/range ref Knowl/ u/stand ref 330 upk 3 5 8 10/11 13 16 Carers should be encouraged to identify support that they require to help them fulfil their caring role. Both individuals and their carers…

• 467 Words
• 2 Pages
Good Essays
• Good Essays

October 13, 2011 330 Inventory 10 Overall 330-10-00 Status Note: General Note The Status Section identifies changes to this Subtopic resulting from Accounting Standards Updates. The Section provides references to the affected Codification content and links to the related Accounting Standards Updates. Nonsubstantive changes for items such as editorial, link and similar corrections are included separately in Maintenance Updates. General 330-10-00-1 330- 10-00No updates have been made to…

• 8552 Words
• 35 Pages
Good Essays
• Good Essays

III. Beliefs on which solution focused family therapy are based Solution focused family therapy is based on the beliefs that people have the power to change their lives and problems. Sometimes they just need a little help finding the solution or even looking at the problem differently. The role of the therapist is to build guidelines and directions for the client to see that they have the potential to change whatever is needed in their lives. “A positive expectation of the client’s life success…

• 1025 Words
• 5 Pages
Good Essays
• Good Essays

ELECTRONIC MEDICAL RECORDS (EMR) AT INOVA HOSPOTAL MIDTERM REPORT MIS 300 PROFESSOR SHUN YE PREPARED BY MEHROZ KHAN VENKATA RAVI TEJA NUKAVARAPU ANSHU BHATTARAI IBRAHIM CHAUDHRY A) Requirements determination strategy We gathered our information from a study conducted through surveys, and direct observation at INOVA hospital. INOVA hospital currently uses electronic medical record (EMR) system, however it is a first generation system, and lacks an integrated system through the hospital…

• 945 Words
• 4 Pages
Good Essays
• Powerful Essays

Marketing Manager Keith Martin BUS 330 Instructor Garlyn Lewis November 26, 2014 Marketing Manager Introduction The role of a marketing manager is very important. The marketing manager is the one person who gets the product made by the company sold in the market. They are the one who develop a marketing strategy. They manage the mix in the market. They are the people who manage the success of the company and they are the one who manages the budget in the company. They guide…

• 2207 Words
• 6 Pages
Powerful Essays