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Q5. A company invests in a project that delivers annual payments of $100 forever! The payments start three years (t=3) from today. Use 5% discount
Q5. A company invests in a project that delivers annual payments of $100 forever! The payments start three years (t=3) from today. Use 5% discount rate. The timeline of the projected cash flows is as follows: What is the present value of this investment today? (Hint: The formula we learned in class rc= 0.05100 will give you the value of the perpetuity at t=2, not t=0 )
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