s decided to spend P1,200,000 to provide facilities immediately and to provide P100,000 of capital replacement at
s decided to spend P1,200,000 to provide facilities immediately and to provide P100,000 of capital replacement at
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The will of a wealthy philanthropist left P5,000,000 to establish a perpetual charitable
foundation. The foundation trustees decided to spend P1,200,000 to provide facilities
immediately and to provide P100,000 of capital replacement at the end of each 5-year
period. If the inverted funds earned 12% per annum, what would be the year-end
amount available in perpetuity from the endowment for charitable purposes?
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