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ipn [44]
3 years ago
9

A rich donor gives a hospital $100,000 one year from today. Each year after that, the hospital will receive a payment 5% larger

than the previous payment, with the last payment occurring in ten years' time. What is the present value (PV) of this donation, given that the interest rate is 9%?
A) $772,173.49
B) $585,987.27
C) $467,922.22
D) $779,843.27
Business
1 answer:
wariber [46]3 years ago
5 0

Answer:

D) $779,843.27

Explanation:

The present value of this donation = Donation in Year 1/(1+ discount rate)^9 + Donation in Year 2/(1+ discount rate)^8 + ….. + Donation in Year 2/(1+ discount rate)^1

= $100,000/(1+9%) + $100,000*(1+5%)/(1+9%)^2 +$100,000*(1+5%)^2/(1+9%)^3…. +$100,000*(1+5%)^9/(1+9%)^10 = $779,843.27

Or we can easily input in excel and generate NPV as file attached; in which the formula is NPV(discount rate, cash inflow year 1 : cash inflow year 10) = (9%, 100000,100000*(1+5%)….,100000*(1+5%)^9) = $779,843.27

Download xlsx
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Your agreement with the school best approximates a tenancy for years.

<h3><u>What is tenancy?</u></h3>
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The dormitory agreement has a starting and ending point making it a tenancy for years.

Know more about tenancy with the help of the given link:

brainly.com/question/14399900

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Natasha2012 [34]

Answer:

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Explanation:

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Normally it is assumed that the law does not always come into operation but only when the variable input exceeds a certain threshold. For example, the increase of workers on an assembly line certainly allows a proportional increase in production, but only until the entire system begins to suffer from malfunctions due to logistics or work organization, precisely because of the its getting bigger. Large industrial plants have shown that they must be divided into sections, however coordinated, precisely because of the decreasing returns. This is because the increase in the number of workers and the mass of the plants does not correspond to a consequent increase in production.

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