in 10 years yiu will begin receiving $184 per year in perpetuity from a family trust...
Homework Answers
Solution:
Present value of cash flow at the end of 10 years = Annual cash inflows till prepetuity / Interest rate = $184 / 5.9% = $3,118.64
Present value today = $3,118.64 * PV factor at 5.9% for 10th period
= $3,118.64 * 0.56369 = $1,757.95
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