Private Colleges and Universities Rely on Money Contributed by Individuals

question 188

Multiple Choice

Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses.Much of this money is put into a fund called an endowment,and the college spends only the interest earned by the fund.A recent survey of 8 private colleges in the United States revealed the following endowments (in millions of dollars) : 60.2,47.0,235.1,490.0,122.6,177.5,95.4,and 220.0.What value will be used as the point estimate for the mean endowment of all private colleges in the United States?

• A)$1,447.8
• B)$180.975
• C)$143.042
• D)$8

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Definitions:

Short-Term Financing

Refers to borrowing funds for a period of less than one year to meet immediate financial requirements.

Spontaneous Financing

Financing that naturally increases as a firm's operating levels increase, typically through trade credits and accruals.

Five Year Bonds

Debt securities issued with a maturity of five years, typically paying interest semi-annually.

Factor Receivables

The financial practice of selling accounts receivable to a third party at a discount to immediately generate cash.