A UCLA donor announces that they will be offering one scholarship every year to a UCLA undergraduate. This will continue in perpetuity. The first scholarship is to be offered exactly one year from now, and from that time the student will receive $20,000 annually for a period of four years, at the end of each year. Thus, the first scholarship recipient receives $20k/year at the end of year 1, 2, 3 and 4. The second scholarship recipient receives $20k/year at the end of year 2, 3, 4, and 5. The third scholarship recipient receives $20k/year at the end of year 3, 4, 5 and 6. Etc... Each student recipient is then expected to repay the principal amount received ($80,000) in 10 equal annual installments, interest-free, starting one year after their fourth scholarship payment was received. This implies that the scholarship is real- ly an interest-free loan. The current interest is 6% for all maturities and is expected to remain unchanged. A) What is the PV of the first scholarship? B) The donor invests a lump sum to fund all future scholarships. What is the size of the required investment today. (Hint: write out a clear timeline of cash flows) A UCLA donor announces that they will be offering one scholarship every year to a UCLA undergraduate. This will continue in perpetuity. The first scholarship is to be offered exactly one year from now, and from that time the student will receive $20,000 annually for a period of four years, at the end of each year. Thus, the first scholarship recipient receives $20k/year at the end of year 1, 2, 3 and 4. The second scholarship recipient receives $20k/year at the end of year 2, 3, 4, and 5. The third scholarship recipient receives $20k/year at the end of year 3, 4, 5 and 6. Etc... Each student recipient is then expected to repay the principal amount received ($80,000) in 10 equal annual installments, interest-free, starting one year after their fourth scholarship payment was received. This implies that the scholarship is real- ly an interest-free loan. The current interest is 6% for all maturities and is expected to remain unchanged. A) What is the PV of the first scholarship? B) The donor invests a lump sum to fund all future scholarships. What is the size of the required investment today. (Hint: write out a clear timeline of cash flows)