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Please solve Question 40 (a, b, c) Please show all work. 40. Upon the untimely and tragic death of their wealthy uncle, his heirs wanted
Please solve Question 40 (a, b, c)
Please show all work.
40. Upon the untimely and tragic death of their wealthy uncle, his heirs wanted to memorialize him with a named donation to the local hospital. They offered the hospital a choice of $80,000 an- nual payments forever or a lump sum payment of $800,000 today. a. What should be the decision if the hospital thinks it could earn an average of 5 percent an- nually on this donation? b. What should be the decision if the hospital thinks it could earn an average of 12 percent annually on this donation? c. What should be the decision if the hospital thinks it could earn an average of 16 percent annually on this donation
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