Reference no: EM132872411

Question - Bandrika is small country lost among the Transylvanian mountains, known to the rest of the world as the leader in research and education in the sphere of Goldberg machine learning (GML), an ultra-modern scientific discipline, leveraging the power of everyday things to perform complex computational tasks. Rube Cube Endowment is established five years ago by the country's most noble families with the ultimate purpose to grant to the local community of GML-scientists. The inflation level of the Bandrika taler averaged 2.5% over the last 5 years. Goldberg machine learning is a fast-growing research front, and thus foreign researchers make extraordinary demands on equipment produced exclusively in Bandrika. The equipment prices in nominal terms are believed to grow 5% yearly during the next 5 years. According to the Bandrika law, to maintain tax-exempt status, every endowment has to spend yearly no less than 3% of NAV, fixed at the beginning of the year. Last year, Rube Cube Endowment distributed 3 000 000 talers among GML researchers - safely far away from the 3% threshold, given its NAV; while sponsors expect about the same (or higher) magnitude of generosity this year, they admit that current distributions should allow for some growth in principal capital either (about 2% in real terms), as they are not going to provide significant gifts in the nearest term. The asset management fee is 1% of NAV at the beginning of the year. Calculate minimal spending rule requirements for the endowment.