Your company is endowing a professor position at UNH. The endowment will generate perpetual annual cash flows
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Question:
Your company is endowing a professor position at UNH. The endowment will generate perpetual annual cash flows of $680 for UNH beginning today. UNH incurred expenses in facilitation with recruiting your company and establishing the necessary infrastructure to recognize the perpetual payments. The cash flows associated with these costs are below.
| Year 0 | Year 1 | Year 2 | Year 3 |
| -3000 | -1500 | -1000 | -500 |
What is the overall net (present) value of this endowment for UNH if the discount rate is 5%? Round your final answer to the nearest cent.
Hint: Find the PV of the perpetuity, the PV of the costs, and sum them together.
Expert Answer:
Related Book For 
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
