Question
A company invests in a project that delivers annual payments of $100 forever! The payments start three years (t=3) from today. Use 5% discount rate.
A company invests in a project that delivers annual payments of $100 forever! The payments start three years (t=3) from today. Use 5% discount rate. The timeline of the projected cash flows is as follows:
What is the present value of this investment today? (Hint: The formula we learned in class / = 100/0.05 will give you the value of the perpetuity at t=2, not t=0)
Please solve in Excel and SHOW WORK!
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The Oxford Handbook Of Computational Economics And Finance
Authors: Shu-Heng Chen, Mak Kaboudan, Ye-Rong Du
1st Edition
0199844372, 978-0199844371
