A generous benefactor to a local ballet plans to make a one-time endowment that 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

B

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A project manager is using the payback method to make the final decision on which project to undertake. The company has a 10% required rate of return and expects a 4% rate of inflation for the following five years

What is the discounted payback of a project that has cash flows as shown in the table? Year Cash Flow 0 -$100,000 1 $20,000 2 $50,000 3 $50,000 4 $25,000 5 $500,000 A) 3.4 years B) 2.6 years C) 5.0 years D) 4.2 years

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New Leaf Produce grows organic lettuces in seaside farms for premium restaurants and health food stores

Which environmental factor may require New Leaf to develop a contingency plan and risk management strategies to guide actions when unpredictable events occur? A) sociocultural environment B) legal and tax environment C) natural environment D) technological environment

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