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P/G method finds an equivalent cash flow one period prior to first non-zero gradient amount True False
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Answer #1

TRUE

P/G method finds an equivalent cashflow one period prior to first non zero gradient amount

It is true since the present value is calculated at that period which is prior to first non zero gradient year. It can be seen in the following diagram:

Ay + (n-1)G A1 1 2 3 n P

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