A local firm will give Texas State University 1.6 million in exactly 1 year from today...

A local firm will give Texas State University 1.6 million in exactly 1 year from today (year 1). Each year after that, they will donate to the university an amount 5% larger than the previous donation, with their last donation occurring in 18 years (year 18). What is the present value of this donation immediately after the 7th payment is given (PV in year 7) assuming an annual interest rate of 6%?

1. 25.10 million

2. 33.52 million

3. 160.00 million

4. 22.29 million

Expert Solution

EXCEL FORMULA:

jeff jeffy answered 2 years ago

Your firm intends to purchase equipment today for $1 million (year 0). The equipment will be...

Your firm intends to purchase equipment today for $1 million (year 0). The equipment will be straight-line depreciated to a book value of $0 over 10 years (years 1-10). The project will last five years, generating revenues of $600,000 per year (years 1-5). Variable costs will equal a constant 30% of revenues. Fixed costs will equal $100,000 per year (years 1-5). Working capital equals 20% of next year's revenues. The equipment will be sold for $600,000 in year 6. The...

Suppose you have the following 4 option contracts that expire in exactly 1 year from today....

Suppose you have the following 4 option contracts that expire in exactly 1 year from today. Premium Strike Price Call 1 $9.89 $75 Call 2 $4.98 $85 Put 1 $3.41 $75 Put 2 $8.30 $85 You establish an option position combining the purchase of Call 1 and Put 2 and the simultaneous sale of Call 2 and Put 1. What is the cost of establishing this position? Complete the following table, calculating the payoffs of the 4 options, the net...

A university spent $1.6 million to install solar panels atop a parking garage. These panels will...

A university spent $1.6 million to install solar panels atop a parking garage. These panels will have a capacity of 800 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 30%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1...

Suppose the interest rate is 5% today and will stay constant for exactly 1 year at...

Suppose the interest rate is 5% today and will stay constant for exactly 1 year at which time it will increase to 7% for exactly 1 year. How much would you pay today for a bond that pays you $1378 in exactly 1 year from today and $2345 in exactly 2 years from today? Support your response

A project is worth $18 million today. One year from today, the project will be worth...

A project is worth $18 million today. One year from today, the project will be worth $22 million with high demand and $14 million with low demand. It will also be possible to sell the project off for $16 million one year from today. Using risk neutral probabilities, which of the following is closest to the value of the abandonment option if the risk-free rate is 4% per year? $0.79 million $1.58 million $2.71 million $3.45 million

The following data give the starting salary for students who recently graduated from a local university...

The following data give the starting salary for students who recently graduated from a local university and accepted jobs soon after graduation. The starting salary, grade-point average (GPA), and major (business or other) are provided. SALARY $29,500 $46,000 $39,800 $36,500 GPA 3.1 3.5 3.8 2.9 Major Other Business Business Other SALARY $42,000 $31,500 $36,200 GPA 3.4 2.1 2.5 Major Business Other Business Using a computer, develop a regression model that could be used to predict starting salary based on GPA...

. Your CPA firm has been contracted by the State of Texas to serve as the...

. Your CPA firm has been contracted by the State of Texas to serve as the internal audit function for The State Board for Educator Certification. The certification board is organized into four broad areas: educator preparation, assessment and accountability, certification, and professional discipline, which includes investigations and enforcement. Please answer the question in a paragraph format, thank you. Internal auditing: assurance & advisory services 4th edition

identify three examples of state and local government incentives in texas and houston that encourage rhe...

identify three examples of state and local government incentives in texas and houston that encourage rhe use of renewable energy or eneegy conservation by individuals

The state of Texas is seeking to raise $500 million through the sale of general obligation...

The state of Texas is seeking to raise $500 million through the sale of general obligation bonds. Which of the following will support the repayment of the bond issue? Select one: a. User Fees b. Property Taxes c. Sales taxes d. None of the above The state of Massachusetts is seeking to raise $300 million through the sale of revenue bonds to repair the roadways. Which of the following is correct? Select one: a. The offering will be advertised in...

Your CPA firm has been contracted by the State of Texas to serve as the internal...

Your CPA firm has been contracted by the State of Texas to serve as the internal audit function for The State Board for Educator Certification. The certification board is organized into four broad areas: educator preparation, assessment and accountability, certification, and professional discipline, which includes investigations and enforcement. Educator preparation. In the area of educator preparation, the certification board works primarily with entities preparing educators for state certification. The work includes guidance in program development, approval, and implementation. The board...

Question