What is the fair value of an investment that pays $100per year in year 1, grows at the rate of 3% and has an8% required rate of return?A. $2,000.B. $1,250.C. $909.09D. $1,287.50

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the fair value of an investment that pays $100 per year in year 1, grows at the rate of 3% and has an 8% required rate of return? A. $2,000. B. $1,250. C. $909.09 D. $1,287.50