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Assume that you are at Year 0 and are looking at two possible investments , both of which have a nominal annual required rate of

Assume that you are at Year 0 and are looking at two possible investments , both of which have a nominal annual required rate of return of 12.24 percent . Investment A will pay a perpetual cash flow stream of $ 490 dollars , starting at Year 5 and going through infinity . Investment B will pay a cash flow of $ 490 at Year 10, but this cash flow will then grow at a constant growth rate of 6 percent every year thereafter ( Year 11 $ 490 x 1.06, etc. ) through infinity . Given this information , determine the difference between what you would pay for Investment B at Year and what you would pay for Investment A at Year O. $ 249.63 $ 265.64 $ 270.85 $ 260,43 $ 255.22

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