An entrepreneur you know has approached you with an offer to buy into his company. You are excited about this opportunity. The product the company makes is so unique that it has no competitors and demand is stable. The cash flows of the company are so solid, you feel they can be taken as riskless, that is, if you invest you are certain to get a cash payoff annually of $10 which for convenience will be paid to you at the end of each year and your expectation is that this stream of cash flows will go on forever, that is, it will be perpetual. You feel the appropriate discount rate for this cash flow stream is 3.5% per year. What is the maximum price you should be willing to pay for the opportunity assuming your assessment of the cash flows is accurate and you are a rational decision maker.

Group of answer choices

$135.00

$185.71

$100.00

$35.10

$285.71