Problem 1

a)

b)

Cher's golf club resort requires $250,000 for initial membership today. Annual dues are $5,000 a year, paid at year's end and expected to grow at 3% annually. How much would you pay today, inclusive for the initial fee and lifetime annual membership, if the required return for the club is 15%? $52,500 $292,916 $302,500 o none of the above