What is the present value weighted growth rate for this investment? the second part of the question needs an answer! thanks,

Answer 1)

Present Value of Perpetuity at year 5 = Cash Flow at year 5*(1+growth%) / (Discount rate-growth%)

Present Value of Perpetuity at year 5 = 480*(1.03) / (.1-.03)

Present Value of Perpetuity at year 5 = 7062.857

Present Value of Perpetuity at year 0 = Present Value of Perpetuity at year 5 / (1+discount rate)^5

Present Value of Perpetuity at year 0 = 7062.857/(1.1)^5

Present Value of Perpetuity at year 0 = 4385.48

Present Value = Sum of all Present Values = 181.82+198.35+225.39+286.87+298.04+4385.48

Present Value = 5575.95

Answer 2)

Present Value of Perpetuity at year 5 = Cash Flow at year 5*(1+growth%) / (Discount rate-growth%)

Present Value of Perpetuity at year 5 = 480*(.97) / (.1- -.03)

Present Value of Perpetuity at year 5 = 3851.54

Present Value of Perpetuity at year 0 = Present Value of Perpetuity at year 5 / (1+discount rate)^5

Present Value of Perpetuity at year 0 = 3851.54/(1.1)^5

Present Value of Perpetuity at year 0 = 2223.854

Present Value = Sum of all Present Values = 181.82+198.35+225.39+286.87+298.04+2223.854

Present Value = 3414.32