Inflation is 2% per year; the interest rate is 8% per year. Your perpetuity project has cash flows that grow at 1% faster than inflation
Inflation is 2% per year; the interest rate is 8% per year. Your perpetuity project has cash flows that grow at 1% faster than inflation forever, starting with $20 next year.
What is the correct project PV?
Step by Step Solution
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Step: 1
Answer To calculate the present value PV of the perpetuity we can use the f...
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Step: 2
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Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
