5. The philanthropist, who announced today that he will donate 100,000 TL to the LÖSEV at the end of each year, declared that these donations will continue in this amount forever. If the annual benchmark interest rate in the market is 10 percent, what is the current economic value of this donation? PV =
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- 5) A rich donor gives a hospital $1,040,000 one year from today. Each year after that, the hospital will receive a payment 6% larger than the previous payment, with the last payment occurring in ten years' time. What is the present value (PV) of this donation, given that the interest rate is 11%?Your organization has been asked to invest in a continuing care retirement center. Your investment will be $600,000 per year for the next 5 years. After 5 years, cash flows will be $400,000 per year for the next 15 years. If your discount rate is 10%:(a) what is the present value of the investment?(b) what is the present value of the cash flows?(c) what is the profitability index?An endowment fund is set up today. It provides payments of $1500 a year for 6- years (first payment one year from now) followed by $2000 a year thereafter forever. If the interest rate is j1 = 6%, how much is needed to be deposited (invested) today? (Answer to nearest dollar
- An investment will generate $9,000 a year for 20 years. If you can earn 9 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it?-Select-YesNoItem 2 Calculate the present value of investment, if you could earn only 5 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it in this case?-Select-YesNo1. You decide to give SCU an endowment that will pay out $50 K per year forever,with a continuously compounded annual increase of 3%. Assuming that you canlock in an interest rate of 5%, gure out how much this endowment would cost.What is the total value of this income stream? 4. Let's revisit the income stream from your endowment to SCU in the rst prob-lem, which is $50 K per year with 3% continuously compounded annual increase.Instead of the 5% investment rate we used in Problem 1, compute the presentvalue of this income stream (lasting forever) assuming a constant interest rater. What is the present value of the income stream ifr= 0:02. For which values of r is the present value finite?In order to create an endowment, which pays Rs 500,000 per year, forever, how much money must be set aside today in the rate of interest is 10%? If the first payment of Rs 500,000 will be received after 3 years, what will be present value of such cash payment?
- You have just celebrated your birthday. Your uncle, has set up a trust fund for you, which will pay you Ghc150,000 when you turn 30 years. If the relevant discount rate is 9%, how much is this fund worth today?1. You decide to give SCU an endowment that will pay out $50 K per year forever, with a continuously compounded annual increase of 3%. Assuming that you can lock in an interest rate of 5%, figure out how much this endowment would cost. What is the total value of this income stream? 2. Suppose Aunt Grace wanted to give annual increases of $2,000 per year. How would this change the computations above? Give values for the amount AuntGrace would have to pay to fund the income stream for 25 years, 50 years, 100years, 200 years, and forever. (Hint: You need only integrate by parts once.) 3. You take all the information about Aunt Grace's gift to your not-quite-so-wealthy Aunt Margaret. In addition to the $1 M already deposited there byAunt Grace, how much would Aunt Margaret have to add to the fund to enable it to pay out an income stream of R(t) = 60 +t forever? 4. Let's revisit the income stream from your endowment to SCU in the first problem, which is $50 K per year with 3% continuously…1. You decide to give SCU an endowment that will pay out $50 K per year forever,with a continuously compounded annual increase of 3%. Assuming that you canlock in an interest rate of 5%, gure out how much this endowment would cost.What is the total value of this income stream? 2.Suppose Aunt Grace wanted to give annual increases of $2,000 per year. How would this change the computations above? Give values for the amount Aunt Grace would have to pay to fund the income stream for 25 years, 50 years, 100years, 200 years, and forever. (Hint: You need only integrate by parts once.) 3. In addition to the $1 M already deposited there by Aunt Grace, how much would Aunt Margaret have to add to the fund to enableit to pay out an income stream ofR(t) = 60 +t forever?
- An investment will generate $12,000 a year for 30 years. If you can earn 12 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it?-Select-YesNoItem 2 Calculate the present value of investment, if you could earn only 9 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar.$ Should you buy it in this case?You decide to give your school an endowment that will pay out $50 K per year forever,with a continuously compounded annual increase of 3%. Assuming that you canlock in an interest rate of 5%, gure out how much this endowment would cost.What is the total value of this income stream?How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
