A firm invests

$3

million in a project, which will yield a perpetuity of

$1

million per year. What is the discount rate

r

for which this project's

PV

is

$4.5

million?

5. A firm invests $3 million in a project, which will yield a perpetuity of $1 million per year. What is the discount rate r for which this project's PV is $4.5 million