BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A wealthy woman just died and left her pet cats the following estate:$50, 000 per year for the next 15 years with the first cash flow today. At a discount rate of 3.2%, what is the feline estate worth in today’s dollars?
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$607, 180.14
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$601, 180.14
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$608, 180.14
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$774, 000.00
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Explanation:
Detailed explanation-1: -Pet: Tommaso (cat) The childless widow of an Italian real estate investor, Assunta rescued 4-year-old stray Tommaso from the streets of Rome. When her health began to decline, Assunta sought an organization that could see to Tommaso’s care after her passing.
Detailed explanation-2: -Ellen Frey-Wouters, who died at the age of 88 without any heirs to inherit her $3 million estate, left $300, 000 in a trust fund for her cats, Troy and Tiger. She left strict instructions that the money be used to ensure her pets would be “lovingly” cared for and never caged.
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