Assume that you will receive $25,000 in year 1 and $15,000 per annum for another 4 years. In year 5, you will receive $10,000. The discount rate is 12%. What is the present value?

Question No. 5: 

John decides to establish an endowment fund to benefit one Bcum Project Finance student at UNY each year. He would like the fund to pay a qualified student each year a one-time grant of US$1,000. He estimates that the fund could earn an interest rate of 5% per annum. How much should John deposit in the fund today?

Answer rating: 100% (QA)

Solution for Question 4 To calculate the present value of the cash flows we need to discount each ca... View the full answer