Endowment, Corporate Finance

Assignment Help:
#quOn Completion of her introductory finance course, Kieran was so pleased with the amount of useful and interesting knowledge she gained that she convinced her parents, who were wealthy alums of the university she was attending, to create an endowment. The endowment would allow three needy students to take the introductory finance course each year into perpetuity. The guaranteed annual cost of tuition and books for the course was $600 per student. The endowment would be created by making a lump-sum payment to the university. The university expected to earn exactly 6% per year on these funds.

a. How large an initial lump-sum payment must Kieran''s parents make to the university to fund the endowment?

b. What amount would be needed to fund the endowment if the university could earn 9% rather than 6% per year on the funds?estion..

Related Discussions:- Endowment

? The effect of incorrect recognition of revenue on, A? The effect of incor...

A? The effect of incorrect recognition of revenue on financial reportssk question #Minimum 100 words accepted#

Benefits of building a collar strategy, a)    Put options on Chicken King w...

a)    Put options on Chicken King with a strike price of $42.50 and 2 months to maturity are properly priced to sell for $3.68 (no bid-ask spread).  Call options with the same stri

Valuation as determined by a multiple of EBITDA, is cash considered to be a...

is cash considered to be additive to this method of valuation?

Capital budgeting, Ask question #A machine has a cost of $180. It will have...

Ask question #A machine has a cost of $180. It will have a life of 3 years, and will be depreciated straight line to zero salvage value. It will result in sales revenue of $200 per

Bond valuation, An investor buys a French government, 10-year bond, paying ...

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

Report of a questionable, Please l have an assignment and l want to send th...

Please l have an assignment and l want to send the document to you so that you will send it to the Tutors on Chegg to help me with it. Can l send it please?

How does an operating lease compare with a financial lease, Problem: (a...

Problem: (a) Distinguish between Non-Deposit Taking and Deposit-Taking Institutions. Provide two differences between the two types of institutions. (b) Who regulates Depos

Bond ratings, why do investors pay attention to bond ratings?

why do investors pay attention to bond ratings?

Time Value of Money, Assume that the average age of the worker is 25 years ...

Assume that the average age of the worker is 25 years old. Typically, retirement is at 65. The firm provides a $2000 monthly payment for 25 years for retirees (i.e., 300 monthly

Write Your Message!

Captcha
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