Donate in order to make all the payments

Assignment Help Financial Management

Reference no: EM131854357

You are planning a gift to the University of Mississippi. The gift will provide the salary for an endowed finance professor (the “[Your Name Here] Professor of Finance”). The first salary payment should be the equivalent of $180,000 today, and will be made one year after you make the donation. You want to be able to continue to pay the same salary indefinitely. Assume that inflation is 2%, that you will donate the gift 50 years from today, and that you can earn 6% annually on your investment.

A. How much will the professor be paid the first year of the endowment?

B. How much do you need to donate in order to make all the payments?

C. How much do you need to invest each year to make the required donation?

Reference no: EM131854357

Questions Cloud

What are possible ramifications of manager actions : What are the basic differences, from the employer's viewpoint, in operating in a union-free environment vs. a unionized environment?

Final energy to the initial energy of the system : If damping causes the amplitude of oscillation of a system to decrease by 50%, then the ratio of the final energy to the initial energy of the system is?

Expected cash flow to merrimack company shareholders : What is the expected cash flow to Merrimack Company's shareholders if the company invests in the project?

What is the aircraft take-off speed in mph : The plane reaches take-off speed in 30.1 seconds. What is the aircraft's take-off speed in mph?

Donate in order to make all the payments : How much will the professor be paid the first year of the endowment? How much do you need to donate in order to make all the payments?

Describe any deviation from the current policy : Unit IV focuses on the development of policymaking models. Using the domestic policy examples of health care and education, examine the framework of a policy.

What is special about the sum : What is special about the SUM of all the forces on each of these objects?

What is the voltage drop across : What is the voltage drop across a 80 ft length of wire at this current?

What is the required rate of return on miami lab stock : Investors expect the average annual future return on the market to be 11.50%. Using the SML, what is the required rate of return on Miami Lab stock?

User Account

All Pages