When r, the annual interest (or discount) rate, increases, what happens to the present value of a
Question:
When r, the annual interest (or discount) rate, increases, what happens to the present value of a perpetuity? Why?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (2 reviews)
When the annual interest or discount rate r increases the present value of a perpetuity decreases Th...View the full answer
Answered By
Charles mwangi
I am a postgraduate in chemistry (Industrial chemistry with management),with writing experience for more than 3 years.I have specialized in content development,questions,term papers and assignments.Majoring in chemistry,information science,management,human resource management,accounting,business law,marketing,psychology,excl expert ,education and engineering.I have tutored in other different platforms where my DNA includes three key aspects i.e,quality papers,timely and free from any academic malpractices.I frequently engage clients in each and every step to ensure quality service delivery.This is to ensure sustainability of the tutoring aspects as well as the credibility of the platform.
4.30+
2+ Reviews
10+ Question Solved
Related Book For
Foundations Of Finance
ISBN: 9781292155135
9th Global Edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Question Posted:
Students also viewed these Business questions
-
1 $5,000.00 deposited in an account earning 6.5%, for 8 years. Calculate the balance in 8 years. a. 8,274.98 b. 8,752.83 c. 8,917.39 d 9,235.36 A firm has net sales of $5,700,000, Cost of Goods Sold...
-
CoursHeroTranscribedText: A 5-year loan in the amount of $48,000 is to be repaid in equal annual payments. What is the remaining principal balance after the third payment if the interest rate is 5...
-
ANSWER ALL What is the total elapsed time for the two processes to run to completion?of a tie. Give the combined execution pattern of the two processes in the format as in part (b), and determine the...
-
Write a Digraph client TransitiveClosure whose constructor takes a Digraph as an argument and whose method isReachable (v, w) returns true if there exists some directed path from \(v\) to \(w\), and...
-
Determine the time necessary for P dollars to double when it is invested at interest rate r compounded (a) Annually, (b) Monthly, (c) Daily, (d) Continuously. r = 10%
-
For the following exercises, use numerical evidence to determine whether the limit exists at x = a. If not, describe the behavior of the graph of the function at x = a. f(x)= 6x23x + 20 4x 25 -; a= 5...
-
In concrete terms, what does the difficulty in valuing an option boil down to?
-
If a mutual funds net asset value is $23.40 and the fund sells its shares for $25, what is the load fee as a percentage of the net asset value?
-
In business combination, the fair value of combinee inventories was $ 150,000 and the carrying amount of inventories was $ 200,000. The journal entry to allocate liquidated company to identifiable...
-
Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term loans, the bank offers 12 percent interest that compounds annually. Your credit application has been...
-
How would you calculate the present value of an investment that produced cash flows of $100 received at the end of year 1 and $700 at the end of year 2?
-
Give two advantages of the information systems auditor performing a stafffunction role within an organization and two advantages of their performing a line-function role.
-
Apply the MARS model to explain how Mother Parkers improves safety in the workplace. 2. What other organizational behaviour topics are generally apparent in this description of how Mother Parkers...
-
Desk Top Designs Alice also told me that she has been in partnership with her two friends Phillip Warhurst and Gurpreet Singh, trading as Desk Top Designs, since 2012. The business specialises in the...
-
a paper on a current (within the past year) human resource event. in discussion you will identify the main topic of the recent event, issue or situation and provide a brief description of the event....
-
Chris and Eric both withdrew a $3,000 distribution: Create two new equity accounts: Chris Partner Distribution and Eric Partner Distribution. Create two checks: Chris Christian, first payee; Eric...
-
Gather relevant details and information about the student provided by the teacher and other SLSOs or support staff. Collect any relevant information from the student's existing Individual and...
-
The adjusted trial balance of Tsai Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2014: Sales Revenue $820,000, Freight-Out $16,000, Sales Returns and...
-
Diamond Walker sells homemade knit scarves for $25 each at local craft shows. Her contribution margin ratio is 60%. Currently, the craft show entrance fees cost Diamond $1,500 per year. The craft...
-
Why are dividends paid to a firms owners not a tax-deductible expense?
-
See the annual report for the Dell Corporation by going to www.dell.com. Scroll to the bottom of the page, then click About Dell, then Investors, and finally the link Annual Reports. Scan the list to...
-
Go to stock.walmart.com to find Walmarts financial reports. Look for key words in the income statement that appear in this chapter, such as sales, gross profits, and net income. What do you learn...
-
Louis files as a single taxpayer. In April of this year he received a $910 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income...
-
6 Lester and Forrest Scruggs have presented you with the following information for Scruggs, Inc. For 2021 they would like for you to 7 complete a(n) 1 adjusted Trial Balance (prepare this on a...
-
A small departmental store buys and sells products from various companies. They buy some of the products at discounted prices when they order large numbers. They sell all their products 20% above the...
Study smarter with the SolutionInn App