Calculate the Present Value of a Growing Annuity Given the Following

question 303

Multiple Choice

Calculate the present value of a growing annuity given the following information: annual cash flows = $200,000; cash flow growth rate = 10%; required rate of return = 3%; timeframe = 25years.

• A) $2,105,008
• B) $2,205,008
• C) $2,305,008
• D) $2,405,008
• E) $2,505,008

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Definitions:

Silt

Fine particles of rock and soil that are smaller than sand and larger than clay, often found on riverbeds and fertile agricultural lands.

Sand

Fine particles of rock and mineral matter, typically found on beaches, deserts, and riverbeds.

Paleozoic Era

That part of geologic time extending from roughly 541 million to 252 million years ago; divided into six periods: Cambrian (appearance of many new animal groups, the Cambrian radiation or Cambrian explosion); Ordovician (diversification of sea life); Silurian (appearance of jawed fishes, terrestrial plants, and air-breathing animals); Devonian (appearance of sharks and bony fishes); Carboniferous (great.

Silurian Period

A geologic time period that occurred roughly 443.8 to 419.2 million years ago, characterized by significant biological diversity and the early development of terrestrial ecosystems.