A constant perpetuity with cash flow, C, will have the first cash flow occur exactly 17 years from now. Each subsequent cash flow will be exactly 7 years after the prior cash flow. You have used the formula, PV=C/r (correctly) to determine a value. The determined value needs to be discounted exactly how many years to get the PV today of the cash flows? The determined value needs to be discounted exactly years to get the PV today of the cash flows.
A constant perpetuity with cash flow, C, will have the first cash flow occur exactly 17 years from now. Each subsequent cash flow will be exactly 7 years after the prior cash flow. You have used the formula, PV=C/r (correctly) to determine a value. The determined value needs to be discounted exactly how many years to get the PV today of the cash flows? The determined value needs to be discounted exactly years to get the PV today of the cash flows.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:A constant perpetuity with cash flow, C, will have the first cash flow occur exactly 17 years from now. Each subsequent cash
flow will be exactly 7 years after the prior cash flow. You have used the formula, PV=C/r (correctly) to determine a value. The
determined value needs to be discounted exactly how many years to get the PV today of the cash flows?
The determined value needs to be discounted exactly
years to get the PV today of the cash flows.
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