Use the perpetuity formula to estimate the value of the following projects generating net benefits in perpetuity.
Question:
a. Bi = 5,000, r = 0.06.
b. Bi = 10,000, r = 0.06.
c. Bi = 10,000, r = 0.05.
d. Bi = 10,000, r = 0.04.
e. Bi i = 5,000, r = 0.035.
Perpetuity
Perpetuity refers to payments that are made without an end or maturity date. A perpetuity is classified as an annuity, which is something that earns a dividend or receives a payment at a regularly scheduled interval, generally yearly. So, how...
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