You Dream of Endowing a Chair in Finance at the Local

Multiple Choice

You dream of endowing a chair in finance at the local university that will provide a salary of $150,000 per year forever,with the first cash flow to be one year from today.If the university promises to invest the money at a rate of 5% per year,how much money must you give the university today to make your dream a reality?

A) $3,000,000
B) $15,000,000
C) $2,857,143
D) This question cannot be answered.