The present value of a $25,000 perpetuity at a 14 percent discount rate is ________.

Name: The present value of a $25,000 perpetuity at a 14 percent discount rate is ________.
Brand: Quizplus
Rating: 4.9 (46 reviews)

Question

Quizplus · Accepted Answer

The present value of a perpetuity is calculated using the formula PV = P / r, where PV is the present value, P is the payment per period, and r is the discount rate. Here, P = $25,000 and r = 0.14. Thus, PV = $25,000 / 0.14 = $178,571.

The Present Value of a $25,000 Perpetuity at a 14