(e) As part their responsible business initiative, DEVCON Industrieswants to establish a trust fund to assist under-privileged studentsin their local community in pursuing 4-year undergraduatedegree programs. The tuition fee is estimated to be $35,000 forthe first year but is expected to increase by 5% per yearthereafter.Required:i. Assuming this trust fund will earn 7.5% interest per annun,calculate the amount required at the start of one student'scollege journey to fund his/her full tuition.ii. If DEVCON Industries would like to sponsor the first studentin two years' time and they currently have $125,000earmarked for investment, what annual rate of interest isrequired to accumulate the amount needed as calculated inpart (i)? DEVCON INDUSTRIES LIMITEDIncome StatementFor the years ended Dec. 31, 2018 and201920182019so00'ss000'sSales9000001125000Cost of Goods Sold300000306600Gross Profit600000818400Selling and Administrative Expenses150000156000Depreciation Expense5400057000Advertising Expenses1800021000Earnings Before Interest and Taxes378000584400Interest Expense30003000Taxable Income375000581400Taxation (35%)131250203490Net Income243750377910Dividends (40%)97500151164Addition to Retained Earnings146250226746Additional InformationShare Price2127.3Ordinary Shares Outstanding120000000144000000DEVCON INDUSTRIESLIMITEDStatement of FinancialPositionAs at Dec. 31, 2018 and 2019ASSETS20182019LIABILITIES & EQUITY20182019Current Assetss00'ss000'sCurrent Liabilitiesso00'sSo00'sInventories264000276000Accounts PayablesNotes Payables138000114000Accounts Receivables294000330000150900132654Cash and Equivalents210900270000288900246654768900876000Non-current Liabilities12000090000Total Liabilities408900336654Net Fixed Assets630600690000EquityCommon Stock264000276000Retained Earnings726600953346Total Equity9906001229346Total Assets13995001566000Total Liabilities & Equity13995001566000

This question can be solved in light of increasing annuity due. That is, a series of growing…

Answered: (c) As part their responsible business…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Give typing answer with explanation and conclusion A University is offering a charitable gift program. A former student who is now 50 years old is consider the following offer: The student can invest $7,500.00 today and then will be paid a 8.00% APR return starting on his 65th birthday (i.e For a $10,000 investment, a 9% rate would mean $900 per year). The program will pay the cash flow for this investment while you are still alive. You anticipate living 20.00 more years after your 65th birthday. The former student wants a return of 5.00% on his investments, but would like to consider this opportunity. Using the student's desired return, what is the value of this deferred annuity today on his 50th birthday?
Present value. Prestigious University is offering a new admission and tuition payment plan for all alumni. On the birth of a child, parents can guarantee admission to Prestigious if they pay the first year's tuition. The university will pay an annual rate of return of 6.5% on the deposited tuition, and a full refund will be available if the child chooses another university. The tuition is expected to be $12,000 a year at Prestigious 18 years from now. What would parents pay today if they just gave birth to a new baby and the child will attend college in 18 years? How much is the required payment to secure admission for their child if the interest rate falls to 2.5%? What would parents pay today if they just gave birth to a new baby and the child will attend college in 18 years? (Round to the nearest cent.)
A generous alum would like to establish an endowment that would sponsor a student organization's conferences in perpetuity. A one-time cost of $500,000 must be paid today to purchase supplies for the conference. The conference is held once every four years and costs $90,000 . The first conference will take place at the end of year 4 . The alum's gift is invested in an account that earns 4% annually. How much would the alum need to place in the endowment to be able to sponsor the student organization's conferences? [Enter your answer with no dollar sign or comma.]
As a future graduate of the University of Minnesota, someday you would like to endow a scholarship (meaning give the university money in your name) to pay for tuition expenses for future UMN students. Assume you just graduated (congratulations!). You plan to work for fifteen years after graduation before endowing this scholarship (at the end of the fifteenth year AFTER graduation). Annual tuition at UMN is $10,000 today, and is expected to grow at the long-term average rate of inflation of 3% per year forever. Savings are expected to earn a return of 7% per year forever. a) The first tuition payment is due one year after the scholarship is endowed. How much will the tuition be when your scholarship makes the first payment? b) You would like the scholarship to pay all tuition for one student per year for the twenty years following the creation of the endowment, how much money do you need to endow the scholarship? c)If you would like the scholarship to pay for tuition for one student…
St. Thomas University (STU) plans to build an addition to the Gus Machado School of Business 4 years from today. It will need to have $8 million in an account at that time. It would like to make 4 equal annual deposits, starting 1 year from today, into an account earning 4% per year to meet this need. What is the amount of each deposit STU must make to meet this need?
1. LNU was able to earn a apply for a loan to invest for future university expansion. If the university where to choose a simple investment way of paying. If the initial 60, 000 PHP loan where to grow to 90, 000 PHP in 5 years. How high did the lender set his annual interest rate?
Mark is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates costs to attend Texas Tech for 4 years including room and board are $20,000 per year. He also assumes tuition costs will rise by 3.5% per year. How much is a 4-year degree going to cost Mark? $92,183.27 $84,298.86 $7,231,158.87 $1,314,002.83
A recent alumnus of your university gifted money to the school to fund annual scholarships for students in need. The school expects to earn an average rate of return of 5.5% and distribute $50,000 annually in scholarships. What was the amount of the gift?
On September 1, 2014, a university received a grant of $100,000 from Tajinder. The money is invested at 8% compounded quarterly. The grant is to be used to pay out semi-annual scholarships for 20 years. What is the size of each scholarship if the first one is awarded on September 1, 2016? Need well explained answer, please do not use excel.
Rr.8.
Subject - account Please help me. Thankyou.
A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $32,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 10 percent, how much must the donor contribute today to fully fund the scholarship? Note: Negative value should be indicated by a parenthesis. > Answer is complete but not entirely correct. $(240,421) X Contribution

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