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USE the formula 1. You will receive $100 per year for 10 years. The discount rate is 10%. What is the present value of this
USE the formula
1. You will receive $100 per year for 10 years. The discount rate is 10%. What is the present value of this stream? 2. Using the previous information, assume now the 100 will increase at a 5% per year from year 1. What is the new present value? 3. Now, compute the present value using the previous information using a perpetuity without and with growth. Compare the 4 present values. Sort them from the highest to the lowest.
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