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 212 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?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

The tallest man ever known was Robert Wadlow, an American, who reached the height of 8 feet 11 inches. He died at age 26 years from an infection caused by the immense weight of his body (491 pounds) and the stress on his leg bones and muscles.

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Cervical cancer (a) Top view of the uterus showing the presence of a tumor in the wall of the cervix Cervical cancer (a) Top view of the uterus showing the presence of a tumor in the wall of the cervix
Masamichi Udagawa and Sigi Moeslinger, Antenna Design, Knoll Toboggan Chair. Masamichi Udagawa and Sigi Moeslinger, Antenna Design, Knoll Toboggan Chair.
Corporate Finance: The Core Corporate Finance: The Core
Fraction of obese individuals by state in 1998 and 2008. In 1998, 42 states had obesity rates below Fraction of obese individuals by state in 1998 and 2008. In 1998, 42 states had obesity rates below
Twenty percent of the automobiles inspected at a state inspection station required repairs to ... Twenty percent of the automobiles inspected at a state inspection station required repairs to ...
Introduction to Corporate Finance, 5th Introduction to Corporate Finance, 5th
Video: Glycolysis Animation

For a complete list of videos, visit our video library