With a 6% interest rate, calculate the present value of the following streams of cashflow $160...
With a 6% interest rate, calculate the present value of the following streams of cashflow $160 per year forever, with the first payment three (3) years from now
Homework Answers
Calculate value of perpetuity as follows:
Value = cash flow/rate
Value = 160/6%
Value = 2666.6666667
____________________________
Present value = value /(1+Rate)^3
Present value = 2666.6666667/(1+6%)^3
Present value = $2,238.98
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