A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization. The donor did not place any use restrictions on the amount pledged. The stream of the payments is discounted at 6 percent. The first payment of $5,000 is received at the end of the first year. The present value factor for a five-payment annuity due on June 30, 20X9, at 6 percent is 4.2124. The present value factor for a four-payment annuity due on June 30, 20X9, at 6 percent is 3.4651.Based on the preceding information, at the end of the first year, the pledge increased net assets without donor restrictions by:
A. $5,000.
B. $4,212.
C. $25,000.
D. $21,062.
Answer: A
Business
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