Answered: a. Draw the cash flow diagram. b. For…

a. Draw the cash flow diagram. b. For how many years starting September1, 2008 can scholarship be awarded? c. What will be the balance in the fund after the last award is made?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 23E

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Concept explainers

Income Statement

Income Statement also commonly called a profit and loss statement, one of the key financial statements (considered together with balance sheet and cash flow statement) which shows the revenues and expenses, as well as the gains and losses of a company for a given period. In other words, it presents the financial performance/profitability of a business over a specified accounting period.

Question

The officers and Board of Directors of the Philippine Institute of Civil Engineers desire to award
a P3,000 scholarship annually to deserving Civil Engineering students for as long as its scholarship
fund last. The fund was started September 1, 2007 by a donor in the amount of P18,000. The PICE
invested this amount at that time at 8% per annum, and plans on adding P600 each year to the fund from
its dues starting September 2008 for as long as awards are made.
a. Draw the cash flow diagram.
b. For how many years starting September1, 2008 can scholarship be awarded?
c. What will be the balance in the fund after the last award is made?

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