Author Question: Cash budgets are completed only on an annual basis because shorter periods of time are too variable ... (Read 43 times)

lidoalex

  • Hero Member
  • *****
  • Posts: 538
Cash budgets are completed only on an annual basis because shorter periods of time are too
  variable and uncertain for meaningful results.
 
  Indicate whether the statement is true or false

Question 2

You dream of endowing a chair in finance at the local university that will provide a salary of 150,000 per year forever, with the first cash flow to be one year from today.
 
  If the university promises to invest the money at a rate of 5 per year, how much money must you give the university today to make your dream a reality?
  A) 3,000,000
  B) 15,000,000
  C) 2,857,143
  D) This question cannot be answered.


karlss

  • Sr. Member
  • ****
  • Posts: 321
Answer to Question 1

FALSE

Answer to Question 2

Answer: A
Explanation: A) PV = PMT/r = 150,000/.05 = 3,000,000.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

Always store hazardous household chemicals in their original containers out of reach of children. These include bleach, paint, strippers and products containing turpentine, garden chemicals, oven cleaners, fondue fuels, nail polish, and nail polish remover.

Did you know?

There can actually be a 25-hour time difference between certain locations in the world. The International Date Line passes between the islands of Samoa and American Samoa. It is not a straight line, but "zig-zags" around various island chains. Therefore, Samoa and nearby islands have one date, while American Samoa and nearby islands are one day behind. Daylight saving time is used in some islands, but not in others—further shifting the hours out of sync with natural time.

For a complete list of videos, visit our video library