Discussion:Help Plz

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Wyasser (talk|edits) said:

28 October 2009
Mr. Anwar will retire at the age of 60. He expects to live 20 more years and to

spend Rs. 55,000 a year during his retirement. How much money does he need to save by age 60 to support this consumption plan? Assume an interest rate of 7 percent.


Question # 02 Star Industries has not been growing since past 20 years because of certain legal hazards. It earns Rs. 15 per share per year and pays it all out to stockholders. The stockholders have alternative, equivalent‐risk ventures yielding 20 percent per year on average. What is the worth of one share of Star Industries? Assume the company can keep going indefinitely.

CrowJD (talk|edits) said:

28 October 2009
I can figure this out on my slide rule, I don't know what's wrong with you kids.
  1. 1) Performing the calculations, and taking into account the debasement of the dollar brought about by the recent printing spree, he's be better off to die now, and save himself the misery of an old age spent in poverty. If he decides to live, he should plan to get by on $12,000 per annum until he's sixty-five, and then he can increase his spending by adding a McDonald's Happy Meal once a month, with icewater instead of soda.
  1. 2) A company is not the Energizer Bunny, though some think they are. Looking at the figures and facts, and doing the calcuations, I conclude that they should shutter it, and get out of town as fast as they can.

Kevinh5 (talk|edits) said:

28 October 2009
(20% ROI each and every year for the foreseeable future - I think the text book was written by Bernie Madoff himself!)

JR1 (talk|edits) said:

October 28, 2009
I think this is in Rand, actually. South Africa. If that changes the answer. I think his best bet is to wait until he's about to run out of money, then use his last Rand to buy a plane tic to the US where he'll be cared for on someone else's money.

EasternPA (talk|edits) said:

28 October 2009
>>he'll be cared for on someone else's money

Yeah, like S-corp owners buying year end SUVs to reduce SE and income tax. Take a deep breadth while you can.

Just remember:

The Democrats spend with abandon other people's money on dumb people.

The Republicans spend with abandon other people's money on smart bombs.

Kevinh5 (talk|edits) said:

28 October 2009
The real problem with question 1 is 'what happens if Mr Anwar lives beyond age 80?' Whose fault will it be and whose E&O insurance will he sue when he finds out that his money ran out before he did? I would not want to be the one who had provided such a faulty but firm calculation.

NoVATaxes (talk|edits) said:

28 October 2009
And if Mr Anwar's life is unexpectedly cut short, his heirs can send email seeking help in expatriating the supposedly sizable sum of unspent Rand.

PVCC-CCIFP (talk|edits) said:

2009-10-29
I suspect it is rupees.

CPAdavid (talk|edits) said:

29 October 2009
At least when S-Corp owners take advantage of the incentive to buy that SUV at year end it stimulates the economy and creates real jobs for real hard-working people, who pay taxes...

but I empathize with the sentiment expressed.

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