mprudential, Incorporated, has an unfunded pension liability of $750 million that must be paid in 25 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 10.0 percent, what is the present value of this liability

Answers

Answer 1

Answer:

PV= $69,221,998.63

Explanation:

Giving the following information:

Future Value= $750,000,000

Number of periods (n)= 25 years

Discount rate (i)= 10%

To calculate the present value, we need to use the following formula:

PV= FV / (1 + i)^n

PV= 750,000,000 / (1.1^25)

PV= $69,221,998.63


Related Questions

MFI Inc. has a beta of . If the expected market return is percent and the​ risk-free rate is ​percent, what is the appropriate required return of MFI​ (using the​ CAPM)? Using the​ CAPM, the appropriate required return of MFI is 14.74​%. ​(Round to two decimal​ places.)

Answers

Answer: 14.38%

Explanation:

Required return using the Capital Asset Pricing Model (CAPM) is:

= Risk free rate + Beta * (Expected market return - Risk free rate)

= 6.5% + 1.05 * (14% - 6.5%)

= 6.5% + 7.875%

= 14.38%

Under the accrual basis of accounting, many of the account balance in the ledger at the end of the accounting period are reported in the financial statement without change. Some accounts require updating, though. When preparing financial statements, the economic life of the business is divided into time periods. The matching principle states that:___________.
1. A purchase made by a business is matched with the actual cost of the item
2. The accounting records and reports are matched with objective evidence
3. The transactions of a business are matched with the transactions of hs owner, creditors and other bussiness
4. The expenses incurred during a period are matched with the reverse that those expenses generated.

Answers

Answer: 4. The expenses incurred during a period are matched with the revenues that those expenses generated.

Explanation:

The accrual basis of accounting works by matching accounting transactions to the period that they occur in. For instance, if revenue is sold in year 1 but the cash for it is only received in year 2, the revenue will be recorded for year 1.

The matching principle falls under the accrual basis and matches the expenses in a period to the revenue that the expenses generated in that same period. This is why the expenses in the income statement are only those that occurred in the current period and expenses for future periods are put in the balance sheet.

In the 1990s there was tremendous interest by government officials in breaking up Microsoft into two companies. One of the companies would have produced operating systems for computers, like Microsoft Windows. The other company would have produced software for this operating system, like Microsoft Excel. Which concept from class could Microsoft use to argue that this breakup would increase total costs

Answers

Answer: Economies of scope

Explanation:

Economies of scope refers to the

proportionate saving that's gained when a company produces two or more goods, such that the cost of producing the goods is less than the cost incurred when each good is separately produced.

In such case, the average total cost of production will reduce as a result of the rise in the number of different goods that are produced.

Therefore, the concept that Microsoft use to argue that this breakup would increase total costs is Economies of scope

Other Questions
In EFG, the measure of G=90, GF = 33, FE = 65, and EG = 56. What ratio represents the sine of F? What are the steps for writing the formula for an ionic compound? Naming an ionic compound? me ayudan porfis doy coronita Which is true about all unicellular and multicellular organisms?They are made of one cell.They reproduce.They cause infections.They are made of multiple cells.? A family has inherited $300,000. If they choose to invest the $300,000 at 12\% per year compounded quarterly, how many quarterly withdrawals of $25000 can be made? (Assume that the first withdrawal is three months after the investment is made). MFI Inc. has a beta of . If the expected market return is percent and the risk-free rate is percent, what is the appropriate required return of MFI (using the CAPM)? Using the CAPM, the appropriate required return of MFI is 14.74%. (Round to two decimal places.) In the 1990s there was tremendous interest by government officials in breaking up Microsoft into two companies. One of the companies would have produced operating systems for computers, like Microsoft Windows. The other company would have produced software for this operating system, like Microsoft Excel. Which concept from class could Microsoft use to argue that this breakup would increase total costs Pls solve the above questionKindly don't spam+_+ Write a letter to your friend in another school expressing your views on the cause of the disturbance during school sports and games and what should be done to avoid future occurrences I really need some help with this question also.A) 2/5B) 3/5C) 11/25D) 14/25 The following are the last 10 run scores Colin got in cricket:28, 13, 4, 12, 32, 22, 13, 22, 26, 32a) Work out Colin's mean score.b) Colin plays cricket again on Sunday. He gets 16 runs.What is his new mean score?Give your answers as decimals. Required Journal entryPaid salary and wages Rs 55,000PLEASE HELP what are the dangers that teenagers must steer clear of it in your youth? What are equivalent expressions please explain The role played by the systems of the body in ensuring survival of farm animals in hot and dry climates RESUELVE USANDO LAS PROPIEDADES DE LA POTENCIAPLISSSSSSSSS CON PROCEDIMIENTOOOOOOO please simplify this one. I need answers fast as possible .(chapter name : surds ) Under the accrual basis of accounting, many of the account balance in the ledger at the end of the accounting period are reported in the financial statement without change. Some accounts require updating, though. When preparing financial statements, the economic life of the business is divided into time periods. The matching principle states that:___________. 1. A purchase made by a business is matched with the actual cost of the item 2. The accounting records and reports are matched with objective evidence 3. The transactions of a business are matched with the transactions of hs owner, creditors and other bussiness4. The expenses incurred during a period are matched with the reverse that those expenses generated. (i) The first general elections were held in India in the year 1952 (ii) Pressure groups are essentially political in nature. (iii) India is a Democracy state. (iv) India has "One-Party" system. (v) Lord Curzon partitioned Bengal in 1905. 213 rizationVhat is the prime factorization of 180?Select a composite number to break into factors. Continuefactoring until all factors are prime.22233.52.2.452.3.3.54802.9.5