If the Present Value of a Perpetual Income Stream Is

question 95

Multiple Choice

If the present value of a perpetual income stream is increasing,the discount rate must be:

• A) Increasing
• B) Decreasing
• C) Changing unpredictably
• D) Keeping pace with inflation

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Definitions:

Fair Market Value

The price a willing buyer would pay a willing seller for property in an open and competitive market, where both parties have reasonable knowledge of the relevant facts.

Contract Validity

The legal enforceability of a contract, requiring it to meet certain established criteria like mutual consent, consideration, and legality of purpose.

Geographical Restriction

Limitations placed upon the area or region in which a business can operate or where products and services can be sold.

Restraint of Trade

Legal agreements or policies that restrict or limit competition or the freedom to conduct business in a certain market.