Suppose that a firm wishes to endow an advanced biological processes

laboratory at a university. The endowment principal will earn interest

that averages 8% per year, which will be sufficient to cover all

expenditures incurred in the establishment and maintenance of the

laboratory for an indefinitely long period of time (forever). Cash

requirements of the laboratory are estimated to be $100,000 now (to

establish it), $30,000 per year indefinitely, and $20,000 at the end of

every fourth year (forever) for equipment replacement. Determine the present worth of all cash flows.