What annual rate of return must the endowment fund earn

Reference no: EM13318200

A permanent endowment at the University of Alabama is to award scholarships to engineering students. The awards are to be made beginning 5 years after the $10 million lump-sum donation is made. If the interest from the endowment is to fund 100 students each year in the amount of $10,000 each, what annual rate of return must the endowment fund earn?

Reference no: EM13318200

Questions Cloud

When purchasing notions for a sewing project : When purchasing notions for a sewing project, you should choose thread that's _______ the fabric color.

Determine the incremental rate of return between alternative : The incremental cash flow between alternatives Z1 and Z2 (Z2 has the higher initial cost). Use an AW-based rate of return equation to determine the incremental rate of return and which alternative should be selected

Integration of key worldwide money market : Integration of Key Worldwide Money Market Interest Rates and the Federal Funds Rate: An Empirical Investigation." Please explain the key points that the author was trying to communicate.

Determine the m and o costs for alternative s : Alternative R has a first cost of $100,000, annual M&O costs of $50,000, and a $20,000 salvage value after 5 years. Alternative S has a first cost of $175,000 and a $40,000 salvage value after 5 years

What annual rate of return must the endowment fund earn : A permanent endowment at the University of Alabama is to award scholarships to engineering students. The awards are to be made beginning 5 years after the $10 million lump-sum donation is made.

What is the differnce comparison : During a big hampster sale at Howies HampsterHut, Hank sold 24 hampsters and Holly sold 75 hamsters, what is the differnce comparison?

What arbitrage opportunities are open to the bank : What arbitrage opportunities are open to the bank? All rates are continuously compounded and black's model to determine the price of the option. Consider both the case where the strike price corresponds to the cash price of the bond and the case wh..

What rate of return did the company make on the process : Barron Chemical uses a thermoplastic polymer to enhance the appearance of certain RV panels. The initial cost of one process was $130,000 with annual costs of $49,000 and revenues of $78,000 in year 1, increasing by $1000 per year.

Explain the temperature of the sample after heating : The root-mean-square (rms) speed of a sample of molecules was found to be 1.8 x 10^3 m s at 25C. After heating, the rms speed was found to be 4.6 x 10^3 m s. What was the temperature of the sample after heating

User Account

All Pages