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I am getting the same result for Growing and Shrinking. Can you double-check? Question 1 of 7 > 071 Current Attempt in Progress Your answer
I am getting the same result for Growing and Shrinking. Can you double-check?
Question 1 of 7 > 071 Current Attempt in Progress Your answer is incorrect. Alysha has been offered two perpetuities: Grow and Shrink. Grow promises her $ 200 in one year and an annual cash flow that will increase by 4 percent per year forever. Shrink, in contrast, promises her $ 1,400 in one year but the annual cash flow will decline by 2 percent forever. If her opportunity cost is 5 percent per year and both annuities cost $ 1,400, which annuity offers her the greater value? (Round "Shrink cost" to 2 decimal places, eg. 125.12 and other answer to 0 decimal places, eg. 12,512) Grow exceeds the cost by $ 18600 Shrink exceeds the cost by $ 18600 Grow offers the greater valueStep by Step Solution
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