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2. Compute the present value (PV) of an annuity that pays $320 forever if the opportunity cost rate is (a) 4 percent, and (b) 8

2. Compute the present value (PV) of an annuity that pays $320 forever if the opportunity cost rate is (a) 4 percent, and (b) 8 percent What is this type of annuity referred to, and why does the PV reduce as the rates increase?

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