Competency Determine current values of cash streams utilizing discounted cash flow techniques. Student Success Criteria View the grading rubric for this

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  • Calculate the total monthly payment that can be withdrawn from the investment over 20 years, given the anticipated 12% annual rate of return continues to be met through the 20 years of retirement.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

  Explain how the four components of emotional intelligence influence management practices. Describe two methods of leadership self-assessment

  Explain how the four components of emotional intelligence influence management practices. Describe two methods of leadership self-assessment including CliftonStrengths assessment. Describe methods of self-management, including personal time management. Apply leadership theories such as Leadership Assessment, Leadership Philosophies, and SMART goals to develop a personal leadership philosophy.

Using the same company you selected in Week 2, analyze the company’s financial management practices in cash and investment management. Did their

Using the same company you selected in Week 2, analyze the company’s financial management practices in cash and investment management. Did their practices demonstrate a conservative, aggressive, or balanced approach toward liquidity and investment? Explain why you characterized their approach as you did. In your response, consider how emerging technologies,

To contact Fubo support service, call 1ー(855)ー771ー9424 from 10 AM to 10 PM ET, use our dedicated live chat on their website, or submit a request form

To contact Fubo support service, call 1ー(855)ー771ー9424 from 10 AM to 10 PM ET, use our dedicated live chat on their website, or submit a request form to resolve your issue . They also offer a virtual assistant for 24/7 help with common issues 1ー(855)ー771ー9424 on Fubo.

To request a refund from Philo, you’ll need to contact their support team through their Help Center, either by calling 1ー(855)ー771ー9424 or contacting

To request a refund from Philo, you’ll need to contact their support team through their Help Center, either by calling 1ー(855)ー771ー9424 or contacting them via email or  live chat. According to Google support/Help and Philo. While refunds are not guaranteed, they may assist you with billing issues on a case-to-case

Today’s world of business is significantly impacted by technological advances. This blurring of boundaries between the physical, digital, and

Today’s world of business is significantly impacted by technological advances. This blurring of boundaries between the physical, digital, and biological world is referred to as the Fourth Industrial Revolution (IR). Advances in artificial intelligence (AI), robotics, the internet of things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies