Principal is required to support remaining cash requirements

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Reference no: EM131524194

Suppose that a firm wishes to create an endowment for a Library. It will earn an interest of 12% per year. Cash requirement are estimated to $450,000 (to establish it), $80,000 per year indefinitely. Also $20,000 every five years and $45,000 every ten years for facilities replacement indefinitely.

a. What amount of endowment principal is required to support remaining cash requirements?

Reference no: EM131524194

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