Holistic holidays limited has an employment contract with loretta bloom, its newly hired ceo. the contract requires a lump sum payment of $1.5 million be paid to ms. bloom upon the successful completion of her first three years of service. holistic holidays wants to set aside an equal amount of money at the end of each month to cover this anticipated cash outflow and expects to be able to earn an annual rate of 5.65 percent compounded monthly on the funds. how much must holistic holidays set aside each month for this purpose? (a)$472,784.59 (b)$497,871.44 (c) $554,903.11 (d)$591,200.28 (e) $629,392.81

Your aunt is thinking about opening a hardware store. she estimates that it would cost $300,000 per year to rent the location and buy the stock. in addition, she would have to quit her $45,000 per year job as an accountant. a. define opportunity cost. b. what is your aunt's opportunity cost of running a hardware store for a year? if your aunt thought she could sell $350,000 worth of merchandise in a year, should she open the store? explain.

Jennifer purchased a house in a brand new development in the outskirts of town. when her house was built, the nearest fire department was nearly 20 miles away. as her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. what effect will the new fire station have on her homeowners insurance premium? a. a new fire department will be more demanding on local taxes. her annual premium will go up. b. the location of a fire department has no bearing on the value of her house. her annual premium will stay the same. c. the new fire department will reduce the risk of financial loss in her home. her annual premium should decrease. d. with a fire department so close (less than 5 miles), financial risk on jennifer’s home practically disappears. she will not need to pay insurance anymore.

Bdj co. wants to issue new 22-year bonds for some much-needed expansion projects. the company currently has 9.2 percent coupon bonds on the market that sell for $1,132, make semiannual payments, have a $1,000 par value, and mature in 22 years. what coupon rate should the company set on its new bonds if it wants them to sell at par?