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

Author Question: A generous benefactor to the local ballet plans to make a one-time endowment which would provide the ... (Read 29 times)

Bernana

  • Hero Member
  • *****
  • Posts: 530
on: Jul 10, 2018
A generous benefactor to the local ballet plans to make a one-time endowment which would provide the ballet with 150,000 per year into perpetuity. The rate of interest is expected to be 5 percent for all future time periods.
 
  How large must the endowment be?
  A) 300,000
  B) 3,000,000
  C) 750,000
  D) 1,428,571

Question 2

The present value of a lottery received as an annuity due is less than the present value of a lottery whose cash flows are received as an ordinary annuity.
 
  (Assume that the interest rate used to discount the cash flows is positive and equal between the two choices and that the magnitude and number of cash flows are equal for the two choices. Only the timing of the cash flows differs between the two choices.)
  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

dantucker

  • Sr. Member
  • ****
  • Posts: 346
Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

Answer: FALSE
Explanation: The annuity due is more valuable than the ordinary annuity.


Bernana

  • Member
  • Posts: 530
Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

ecabral0

  • Member
  • Posts: 310
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

Sperm cells are so tiny that 400 to 500 million (400,000,000–500,000,000) of them fit onto 1 tsp.

Did you know?

Nitroglycerin is used to alleviate various heart-related conditions, and it is also the chief component of dynamite (but mixed in a solid clay base to stabilize it).

Did you know?

The modern decimal position system was the invention of the Hindus (around 800 AD), involving the placing of numerals to indicate their value (units, tens, hundreds, and so on).

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Earth’s history is divided into nested sets of time--eons, eras, periods, and epochs--and is called Earth’s history is divided into nested sets of time--eons, eras, periods, and epochs--and is called
The first commercially successful typewriter, manufactured in quantity beginning in 1874, surely fue The first commercially successful typewriter, manufactured in quantity beginning in 1874, surely fue
Make your mitochondria proud! Make your mitochondria proud!
In middle childhood, children spend increasing amounts of time with peers and friends. In middle childhood, children spend increasing amounts of time with peers and friends.
MSDS labels provide an abridged version of substance hazards information and must be permanently ... MSDS labels provide an abridged version of substance hazards information and must be permanently ...
Fingertip kneading along the paraspinal muscles from shoulders to buttocks. Check to make sure all ... Fingertip kneading along the paraspinal muscles from shoulders to buttocks. Check to make sure all ...
Video: Sister chromatids of a metaphase chromosome animation

For a complete list of videos, visit our video library