This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: You have decided to endow the insert your name here Chair in Finance at the State University. How ... (Read 64 times)

Bob-Dole

  • Hero Member
  • *****
  • Posts: 547
on: Jul 10, 2018
You have decided to endow the insert your name here Chair in Finance at the State University.
 
  How much money must you deposit into the endowment account today if the Chair pays 125,000 per year forever (first payment one year from today) and is invested at a rate that pays out 4.50 per year forever
  What will be an ideal response?

Question 2

Given a positive interest rate and a positive cash flow, an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.
 
  Indicate whether the statement is true or false.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

fauacakatahaias

  • Sr. Member
  • ****
  • Posts: 353
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: PV = = = 2,777,777.78.

Answer to Question 2

Answer: FALSE
Explanation: The annuity due is always greater.


Bob-Dole

  • Hero Member
  • *****
  • Posts: 547
Reply #2 on: Jul 10, 2018
Thank you :)


fauacakatahaias

  • Sr. Member
  • ****
  • Posts: 353
Reply #3 on: Jul 10, 2018
Happy to help you


« previous next »
 

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

The average human gut is home to perhaps 500 to 1,000 different species of bacteria.

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Iowa State University's Tornado/Microburst Simulator Iowa State University's Tornado/Microburst Simulator
Laboratory, Institute of Biochemistry, University of Cologne. Laboratory, Institute of Biochemistry, University of Cologne.
Charles and Ray Eames, Side Chair, Model DCM. Charles and Ray Eames, Side Chair, Model DCM.
Hexoses exist in boat and chair conformations Hexoses exist in boat and chair conformations
Effect of Increasing the Investment Rate on the Steady State Effect of Increasing the Investment Rate on the Steady State
State the transformations on the function f(x)= 4sin(x-pi)-2 and then graph two cycles below. State the transformations on the function f(x)= 4sin(x-pi)-2 and then graph two cycles below.
Video: Introduction to Photolithography - WC, BLF, PA, Hard and Soft baking

For a complete list of videos, visit our video library