What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of year one and then grows at a rate of 5% per year indefinitely? The rate of interest used to discount the cash flows is 13%.
Thank you for the opportunity to help you with your question!
pv = summation of (80000*(1.05/1.13)^r) where r varies from 1 to infinity
pv = 1.05*10^6 = $1050000.00
Content will be erased after question is completed.
Enter the email address associated with your account, and we will email you a link to reset your password.
Forgot your password?