By how much will shareholders equity increase

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Questions -

Q1. An anonymous benefactor wants to fund ten $10,000 scholarships per year forever. Assuming a 5% interest rate, what amount does he/she have to give today to achieve this goal?

Q2. A corporation earns $25 million in net income, pays $1 million in preferred stock dividend and declare $5 million in common stock dividends. By how much will shareholders equity increase on the balance sheet?

Q3. What decision would be made using IRR for a project with an initial investment of $30,000 and the following stream of cash flows, assuming that the firm required return is 15 percent. Year 1 $15,000 Year 2 25,000 Year 3 $14,000

A. Accept IRR > 0

B. Accept NVP  > 0

C. Accept NVP  > IRR

D. Accept IRR > WACC

Reference no: EM133189117

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