A college received a contribution to its endowment fund of $2 million. It can never touch the principal but can use the earnings. At an assumed interest rate of 9.5 percent, how much can the college earn to help its operations each year?

Q: A donor wants to fund a growing perpetuity that will pay $14,164 per year to a local museum,…

A: Yearly payment = $14,164 Growth rate = 5% Interest rate = 9%

Q: An enterprise needs to set aside a fund to meet the following future annuity payments to an…

A: The payments are made at the beginning of each year. Therefore, there is an annuity due. The present…

Q: d) A person invests $50,000 in an investment that earns 6 percent. If $6,000 is withdrawn each year,…

A: Step 1 The idea of the time value of money (TVM) holds that a quantity of money is worth more now…

Q: 3) An alumni association wants to establish an endowment that can provide $1million annually for…

A: Equivalent annual cost  The annual cost of owning, running, and maintaining an asset over the course…

Q: Deakin University wants to establish a trust fund that will provide a perpetual annual scholarship…

A: The notion of the present value asserts that an amount of money today is worth more than the same…

Q: MetaYou have accumulated $8,000 toward the down payment on a piece of lake front property in rural…

A: The rate of return is a measure that indicates the performance of the investment for the respective…

Q: A firm's stock is selling for $71. The next annual dividend is expected to be $2.00. The growth rate…

A: Given that, Current Market price of the stock (P0) = $ 71 Expected Dividend for next year (D1) = $ 2…

Q: A    rich donor gives a    hospital    $1,040,000    one year from today. Each year after that, the…

A: First donation (F) = $1,040,000 Growth rate (g) = 0.06 Interest rate (r) = 0.11 Period (n) = 10…

Q: of $100,000 from Tajinder. The money is invested a 8% compounded quarterly. The grant is to be used.…

A: Effective semiannual interest rate = (1 + 0.08/4)^2-1 = (1 + 0.02)^2-1 = (1.02)^2-1 = 0.0404 ~4.04%…

Q: how much can we paid in scolarships at the end of half year if $90.000 is deposited in a trust fund…

A: Amount Deposited = $90,000 Annual Interest Rate = 8.5%Semiannual Interest Rate = 8.5% / 2Semiannual…

Q: A corporation creates a sinking fund in order to have $440,000 to replace some machinery in 8 years.…

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

Q: Having achieved immense success since graduating from university, you have set up an endowment fund…

A: First annual contribution (X) = $100000 Constant rate of growth (d) = - 2% (Declining rate) Interest…

Q: a college begins a capital campaign to create a fund to provide scholarships to worthy students, If…

A: Given: Scholarship amount (PMT)=$200000Interest rate =7% or 0.07

Q: How much must be deposited today into the following account in order to have a college fund in 11…

A: The time value of money is a concept in finance that takes into account the effect of compounding in…

Q: An endowment fund is set up today. It provides payments of $1500 a year for 6- years (first payment…

A: The question is based on the concept of present value for annuity and perpetuity payment .

Q: Clearlake Optical has a $50,000 note that comes due in 5 years. The owners wish to create a sinking…

A: Compound = Semiannually = 2Future Value = fv = $50,000Time = t = 5 * 2 = 10Interest Rate = r = 4.5 /…

Q: A corporation creates a sinking fund in order to have $590000 to replace some machinery in 9 years.…

A: Future value refers to the value at the end of the tenure of future cash flows at the regular…

Q: A corporation creates a sinking fund in order to have $520,000 to replace some machinery in 11…

A: A sinking fund is created to replace an existing machine. Future value of the sinking fund (FV) =…

Q: The trustees of a college have accepted a gift of $175,000, but are required to deposit it in an…

A: Here, Amount DepositedToday $1,75,000.00Interest Rate10%Compounding Period (Semi Annual)2Withdrawal…

Q: Q10. James decided to fund a school in Orange County in perpetuity. The first payment will be made…

A: Present value refers to the discounted value of future cash flows. A perpetuity is a series of equal…

Q: You have accumulated $8,000 toward the down payment on a piece of lake front propert wish to…

A: Today value=$8000Future value=$12000Period=4 yearsFind out interest rate.

Q: Camosun College has just received a donation of $50,000. The donor has stipulated that the funds…

A: The term "annual bursary" represents a monetary award provided by colleges and other authorities to…

Q: A corporation creates a sinking fund in order to have $910,000 to replace some machinery in 9 years.…

A: Future value is the estimated value of current assets that is discounted  at an assumed rate of…

Q: A corporation creates a sinking fund in order to have $910,000 to replace some machinery in 8 years.…

A: Periodic deposits commonly referred to as payments are the defined amount of money that an…

Q: What is the size of each scholarship if the first one is awarded on September 1, 2016? Need well…

A: Effective semiannual interest rate = (1 + 0.08/4)^2 -1 = (1 + 0.02)^2 -1 = (1.02)^2 -1 = 0.0404 ~…

Q: What is the fair value of the grant payments according to the Financial Accounting Standards Board…

A: Fair value means the price which we have to pay for purchasing a particular item in the normal…

Q: Find the present worth of this cost.

A: An endowment fund is the fund set aside and invested, the earnings of which will be utilized for the…

Q: What is the size of the scholarship payments that students at a college would receive at the end of…

A: The scholarship amount will be the quarterly interest earned on such endowment fund

Q: Jackson Clinic is starting an endowment fund to pay for the expenses of a allied health training…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Income Statement

Income Statement also commonly called a profit and loss statement, one of the key financial statements (considered together with balance sheet and cash flow statement) which shows the revenues and expenses, as well as the gains and losses of a company for a given period. In other words, it presents the financial performance/profitability of a business over a specified accounting period.