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Consider a perpetuity that pays $1,000 at the end of each year, forever. Use 10% annual discount rate in the following calculations. (1) (1pt) What

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Consider a perpetuity that pays $1,000 at the end of each year, forever. Use 10% annual discount rate in the following calculations. (1) (1pt) What is the present value of this perpetuity? (2) Suppose it costs $10,000 to purchase the above perpetuity. (i) (2pt) What is the NPV of investing in this perpetuity? (ii) (2pt) What is the profitability index (PI) for this investment? (iii) (2pt) What is the IRR for this project? (Hint: Trick question, no calculation necessary.) (iv) (3pt) What is the discounted payback period (DPP) for this project? (Hint: This answer is oo. Please provide justifications to receive full credit.)

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