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Question 2 Show that the present value (PV) of an annuity A, received for n years at interest rate k can be represented by the
Question 2 Show that the present value (PV) of an annuity A, received for n years at interest rate k can be represented by the equation (15 marks) PK- 1(1-(1-k)" Show how this annuity received as a perpetuity P can be represented by the equation (3 marks) and write a note on the behaviour of PVo for as k varies. Write a note on the concept of net present value, and outline its connection with the concept of internal rate of return (7 marks)
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