CFIN (with Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
CFIN (with Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
5th Edition
ISBN: 9781305661653
Author: Scott Besley, Eugene Brigham
Publisher: Cengage Learning
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Chapter 4, Problem 17PROB
Summary Introduction

The period payments are $320 which is paid for forever at an opportunity cost of 4%, 8%, and 10%.

Present value of perpetuity is the current value of an annuity which has continuous payments at predetermined interest rate for infinite period.

PV=PMTr

Here,

The present value is “PV”.

The periodic payments are “PMT”.

The interest rate is “r”.

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