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MBA/MSF 655, Financial Management & Strateyy 24 Assume the following regarding a growing annuity valuation problem: Your salary at the end of the last year that you work is $90,000. your income stream to begin at the end of your first aume all amounts are "end- payment equal to 70% of your last working year's salary. (Assume all amounts are of-year payments.) You plan to be retired for 25 years. ke your retirement income will grow at a constant rate equal to a 3.07 ( compensate for expected inflation). Using a discount rate of 8%, what is the present value at the beginning of your first year of retirement, i.e. one period prior to the first retirement payment) of your projected zo year retirement income stream? a. 960,730 b. 916,893 c. 672,511 d. 211,573 e. 3,308,543 f. 483, 107 (if using a bubble answer sheet, just write "t" in to select f) 25 Which of the following would least likely be considered as signaling a potential problem regarding the "quality of earnings" for a firm? a. the firm has experienced a significant increase in earnings relative to the industry overall b. the firm's accounts receivable account is increasing at a rate faster than the firm's increase in sales. c. the firm has announced a delay in their release of financial statements due to a change in auditors d. the firm's accounts receivable account is increasing, but at a rate slower than the firm's increase in sales. e. all of the above would be considered signals of potential problems regarding he firms quality of earnings

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