1. Which of the following is true about perpetuities?

a.Since a perpetuity generates cash flows every period infinitely, the cash flow generated equals the PV times the interest rate.

b.Since a perpetuity generates cash flows every period infinitely, initial cash outflow must be discounted to calculate the present value.

c.Since a perpetuity generates cash flows every period infinitely, there is no way to solve for the cash flow using the present value and the interest rate.

d. Since a perpetuity generates cash flows every period infinitely, its future value is as same as its present value.