Which of the following statements is true of a perpetuity?
A) A perpetuity has a fixed maturity.
B) The present value of each payment made by a perpetuity is less than the previous payment.
C) The present value of a perpetuity that pays $100 every year when the annual rate of discount is 5% is $1,000.
D) The present value of a perpetuity that pays $200 every year when the annual rate of discount is 7% is $1,750.
Correct Answer:
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