What is the value of this gift today at a discount rate

Assignment Help Financial Management
Reference no: EM132055805

A wealthy benefactor just donated some money to the local college. This gift was established to provide scholarships for worthy students.

The first scholarship will be granted one year from now in the amount of $35,000. Thereafter, one scholarship of the same amount will be granted each year. The scholarship fund will last indefinitely.

What is the value of this gift today at a discount rate of 5% compounded annually?

Reference no: EM132055805

Questions Cloud

Standard for the standardization of base solutions : Oxalic acid dihydrate, H2C2O4.2H2O, is often used as a primary standard for the standardization of base solutions.
What is the expected value and standard deviation : What is the expected value and standard deviation of the rate of return on the client's portfolio?
What is the mass percent of nitrogen in the compound : A 0.107-g sample of a compound was treated as above, producing 80.8 mL of N2 saturated with water vapor at 25 °C and 746.9 torr.
What is the absolute temperature of gas sample : What is the absolute temperature of this gas sample when thepressure is multiplied by five and the volume is reduced to onethird?
What is the value of this gift today at a discount rate : What is the value of this gift today at a discount rate of 5% compounded annually?
Obtaining the benefits of cheap energy : Is it fair for the industrialized nations to expect that all nations, including the less developed ones, restrict their use of fossil fuels
Exact formula of a chemical compound : If IR does not give you the exact formula of a chemical compound, what useful information does it provide?
Different liquids have increased surface tension like water : What if we could make different liquids have increased surface tension like water, or even decreased surface tension like gasoline?
How large should weis dividend payout ratio be next year : According to the residual distribution model (assuming all payments art in the form of dividends), how large should Wei's dividend payout ratio be next year?

Reviews

Write a Review

Financial Management Questions & Answers

  Treat the sale of the stock as long-term capital gain

Cynthia is a successful sculptor who created a work that is now worth $400,000 and has no tax basis. Cynthia forms a corporation and contributes the sculpture to it in exchange for the corporation's shares. Fourteen months later, she sells all the st..

  How long do you have to pay before the account is overdue

You place an order for 320 units of inventory at a unit price of $180. The supplier offers terms of 3/15, net 30. How long do you have to pay before the account is overdue? a-2 If you take the full period, how much should you remit? What is the disco..

  Interest rate for the annuity

Assuming a 12 percent interest rate for the annuity, how much will this annuity be?

  Term structure of interest rates

you want to invest your savings of 20,000 in government securities for the next two years. Currently, you can invest either in a security that pays interest of 8.0% per year for the next two years Ornish you Curity that matures in one year but pays o..

  What is the intrinsic value of the stock if investors

This dividend is expected to grow at a rate of 11% per year for the first 2 years and after that 5% for the other years.

  Consistently predict either the direction of stock market

“No one can consistently predict either the direction of the stock market or the relative attractiveness of individual stocks and thus no one can consistently obtain better overall returns than the market. What are the weaknesses of this argument?

  Used as the initial cash outflow for this project

The actual contruction cost is estimated at $1.3 million. What amount should be used as the initial cash outflow for this project?

  Factors used in computing present value of cash flows

What are the factors used in computing the present value of cash flows?

  Futures contract and locked in forward rate

How much would you pay in $ for the products if you had purchased a 30 day futures contract and locked in the forward rate?

  Calculate the net effect

calculate the net effect that a change in the annually compounded risk free rate on the price of a commodity future contract whose spot price as of march 30 was 49.90.

  How much should she be saving during her working life

If the investor can earn 6% during her retirement years and 10% during her working years, how much should she be saving during her working life?

  Discuss the determinants of foreign exchange rates

Discuss the determinants of foreign exchange rates.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd