S. Ken Flint retired as president of Colour Tile Company, but he is currently on a consulting contract for $59,000 per year for the next 12 years. (Use a Financial calculator to arrive at the answers. Round the final answers to the nearest whole dollar) a. If Mr. Flint's opportunity cost (potential return) is 11 percent, what is the present value of his consulting contract? Present value $383049 b. Assuming Mr. Flint will not retire for two more years and will not start to receive his 12 payments until the end of the third year, what would be the value of his deferred annuity? Present value $310891 c. Recalculate part a assuming the contract stipulates that payments are to be made at the beginning of each year $ Present value

Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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S. Ken Flint retired as president of Colour Tile Company, but he is currently on a consulting contract for $59,000 per year for the next
12 years. (Use a Financial calculator to arrive at the answers. Round the final answers to the nearest whole doller.)
a. If Mt. Flint's opportunity cost (potential return) is 11 percent, what is the present value of his consulting contract?
Present value
$383049
b. Assuming Mr. Flint will not retire for two more years and will not start to receive his 12 payments until the end of the third year, what
would be the value of his deferred annuity?
Present value
$310891
c. Recalculate part a assuming the contract stipulates that payments are to be made at the beginning of each year.
$
Present value
Transcribed Image Text:S. Ken Flint retired as president of Colour Tile Company, but he is currently on a consulting contract for $59,000 per year for the next 12 years. (Use a Financial calculator to arrive at the answers. Round the final answers to the nearest whole doller.) a. If Mt. Flint's opportunity cost (potential return) is 11 percent, what is the present value of his consulting contract? Present value $383049 b. Assuming Mr. Flint will not retire for two more years and will not start to receive his 12 payments until the end of the third year, what would be the value of his deferred annuity? Present value $310891 c. Recalculate part a assuming the contract stipulates that payments are to be made at the beginning of each year. $ Present value
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