An engineering school has just completed a new engineering complex worth $50 million. A campaign targeting alumni is planned to raise funds for future maintenance costs. which are estimated at $2 million per year. Any unforeseen costs above $2 million per year would be obtained by raising tuition. Assuming that the school can create a trust fund that earns 8% interest annually. how much has to be raised now to cover the perpetual string of $2 million annual costs?
An engineering school has just completed a new engineering complex worth $50 million. A campaign targeting alumni is planned to raise funds for future maintenance costs. which are estimated at $2 million per year. Any unforeseen costs above $2 million per year would be obtained by raising tuition. Assuming that the school can create a trust fund that earns 8% interest annually. how much has to be raised now to cover the perpetual string of $2 million annual costs?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An engineering school has just completed a new engineering complex worth $50 million. A campaign targeting alumni is planned to raise funds for future maintenance costs. which are estimated at $2 million per year. Any unforeseen costs above $2 million per year would be obtained by raising tuition. Assuming that the school can create a trust fund that earns 8% interest annually. how much has to be raised now to cover the perpetual string of $2 million annual costs?
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