If the interest rate is 10%,what is the present value of a stream of annual future cash flows equal to $1,000,expected to be paid at the end of every year,forever?
A)$1,00,000.00
B)$10,000,000
C)$1,500,000
D)$10,000
E)None of the above.

Question

Quizplus · Accepted Answer

The present value of a perpetuity is calculated as the annual cash flow divided by the interest rate. Here, $1,000 / 0.10 = $10,000.

If the Interest Rate Is 10%,what Is the Present Value