PQ is purchasing the lease on a property which has an annual lease payment of $300 in

Question:

PQ is purchasing the lease on a property which has an annual lease payment of $300 in perpetuity. The lease payments will be paid annually in advance.
PQ has a cost of capital of 12 percent per annum.
The present value of the lease payments is:
(a) $2 500
(b) $2800
(c) $3600
(d) $3900

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...