U court settlement awarded an accident victim four payments of $50,000 to be paid at the end of each or the next four years. Using a discount rate of 4%, calculate the present value of the annuity. A. $173,255 B. $178,495 C. $181,495 D. $184,095 E. $200,000 17. A stream of unlimited number of equal cash payments is termed: A. an annuity B. an even cash flows C. an installment plan D. a perpetuity 18. The annual rate of return is variously referred to as the A. discount rate. B. opportunity cost. C. cost of capital D. all of the above. 19. You would like to establish a trust fund that will provide $50,000 a year forever for your heir The trust fund is going to be invested very conservatively so the expected rate of return is on 2.75%. How much money must you deposit today to fund this gift for your heirs? A. $1,333,333.33 B. $1,375,000.00 C. $1,425,000.00 D. $1,666,666.67 E. $1,818,181.82 20. You have the opportunity to buy a perpetuity which pays $1,000 annually. Your required ra return on this investment is 16 percent. What is the present value of this perpetuity? A. $10,000.00 B. $6,250.00 C. $6,666.67 D. $7,500.00 E. $8,728.50