Bob, a philanthropist, is not sure what rate of return his gifts may realize once donated to
Question:
Bob, a philanthropist, is not sure what rate of return his gifts may realize once donated to his favorite charity. Determine the capitalized cost of $10,000 every 5 years forever, starting 5 years from now at an interest rate of
(a) 3%
(b) 8% per year.
(c) Explain the significant difference between the two capitalized costs.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 87% (8 reviews)
Cumulative valve of capitalized cost of 10000 every 5 years forever is equal to the present value of ...View the full answer
Answered By
Rahul Nagpal
I am a management student at IIM, a mechanical engineering graduate and also worked for two years with a startup as a Manager. I am an active learner of marketing, financial markets, and economics and teaching help me to learn more with others.
0.00
0 Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
Determine the capitalized cost of a permanent roadside historical marker that has a first cost of $78,000 and a maintenance cost of $3500 once every 5 years. Use an interest rate of 8% per year.
-
What rate of return in the second year of an investment will wipe out a 50% gain in the first year?
-
What rate of return in the second year of an investment will nullify a 25% return on investment in the first year?
-
Assume that a security is selling at INR 217 and American call and American put options are available on the stock with 3 months maturity and an exercise price of INR 210. The call is selling at INR...
-
Show that (a) Log(-ei) = 1 - /2i; (b) Log (1 - i) = ln 2 - /4 i.
-
LO6 How do deductions for adjusted gross income and deductions from adjusted gross income of an individual differ?
-
When sales are Rs. 2 lakhs, fixed cost Rs. 30.000, P/V ratio 40% the amount of profit will be: (a) Rs. 50,000 (b) Rs. 80,000 (c) Rs. 12,000.
-
Referring to the contingency table in Problem 4.8, if an employed adult is selected at random, what is the probability that a. The employed adult felt tense or stressed out at work? b. The employed...
-
Astro Corporation was started with the issue of 4,800 shares of $8 par stock for cash on January 1, 2018. The stock was issued at a market price of $15 per share. During 2018, the company earned...
-
A&B Enterprises is trying to select the best investment from two alternatives. Cash flows for each alternative are:Initial outlay $ 93,000 $ 93,000 Year Investment A Investment B 1 $7,000 $63,000...
-
A wealthy businessman wants to start a permanent fund for supporting research directed toward sustainability. The donor plans to give equal amounts of money for each of the next 5 years, plus one now...
-
Find the capitalized cost of a present cost of $300,000, annual costs of $35,000, and periodic costs every 5 years of $75,000. Use an interest rate of 12% per year.
-
The equilibrium-constant expression for a gas reaction is Write the balanced chemical equation corresponding to this expression. Ke [H,S][O2J
-
2.11.2Project:Performance Task: The Parallax Problem Project Geometry Sem 1 (S3537251) Julio Duenas Points possible:120 Date: ____________ The Scenario:You're looking for a sponsor to pay for you to...
-
If the most common treatment of assigning overapplied overhead was used, the final balance in Cost of Goods Sold would have been * (1 Point) At the end of the last fiscal year, BREAD Company had the...
-
Angelina received new word processing software for her birthday. She also received a cheque with which she intends to purchase a new computer. Angelina's UNILUS Professor assigned a paper due in two...
-
At date t, the portfolio P to be hedged is a portfolio of Treasury bonds with various possible maturities. Its characteristics are as follows: Value YTM MD Convexity $1,450 6% 4.25 55 We consider...
-
A playground merry-go-round with an axis at the center (radius R = 1.3 m and rotational inertia | = 1.2 x 103 kgm2) is initially rotating at angular velocity w = 0.21 rad/s clockwise). A girl of mass...
-
Go to Connect online for the financial statements of Cadbury, plc. Required: 1. The company distributes its products through wholesalers. What items would you expect to be subtracted from sales...
-
How does health insurance risk differ from other types of insurance risk (e.g., automobile or homeowners insurance)? What is the difference between cost sharing and cost shifting? Is retiree health...
-
On December 30, Burrows Inc. sold $12,000 of merchandise to Wall Company on account, with terms 2/10, n/30. The merchandise cost Burrows $8,000. On January 3, Wall determines that a portion of the...
-
Rework Problem 4-47 assuming the construction bonds had been retired as an annuity (i.e., equal uni-form annual payments had been made to repay the $35 million). Data from Problem 4-47: A piece of...
-
It is likely that your college tuition will in-crease an average of 8% per year for the next 4 years. The annual cost of tuition at the beginning of your freshman year in college will be $12,000 (A 1...
-
Amy Parker, a 22-year-old and newly hired marine biologist, is quick to admit that she does not plan to keep close tabs on how her 401(k) retirement plan will grow with time. This sort of thing does...
-
What is the NPV of a project that costs $34,000 today and is expected to generate annual cash inflows of $11,000 for the next 7 years, followed by a final inflow of $14,000 in year 8. Cost of capital...
-
help!!! Use the above information to calculate ending inventory using FIFO for a company that uses a perpetua/inventory system
-
Rocky Mountain Chocolate Factory (RMCF) founder and president Frank Crail employs 220 people in 361 outlets in the United States, Canada, United Arab Emirates, Japan, South Korea and Saudi Arabia. If...
Study smarter with the SolutionInn App