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Given a cash flow stream X=(x0,x1,x2.....xn), a new stream Xinfinity of infinite length is made by successively repeating the corresponding finite stream. The interest rate
Given a cash flow stream X=(x0,x1,x2.....xn), a new stream Xinfinity of infinite length is made by successively repeating the corresponding finite stream. The interest rate is r. Let P and A be the present value and the annual worth, respectively, of stream X. Finally, let Pinfinity be the present value of stream Xinfinity. Find A in terms of Pinfinity and conclude that A can be used as well as Pinfinity for evaluation purposes.
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