Having Acquired Great Fortune Based on Your Mastery of Finance,you

question 35

Multiple Choice

Having acquired great fortune based on your mastery of finance,you decide to set up a charity.You'd like to give the finance department of your alma mater $100,000 next year,and you want to make an annual contribution in perpetuity,with each year's contribution growing by 4%.The university can generate an 8% return on invested capital.What is the value of a lump-sum donation needed today to accomplish this?

• A) $3,561
• B) $833,333
• C) $1,250,000
• D) $2,500,000

---

Definitions:

Temperature Changes

Variations in the degree of heat present in the environment or within a system.

Water Evaporation

The process by which water transforms from a liquid to a gas phase, often contributing to the Earth's hydrological cycle.

Nutrients

Substances obtained from food that are essential for growth, metabolism, and for the body to function properly.

Monosaccharides

The simplest form of carbohydrates, consisting of a single sugar molecule, such as glucose or fructose.