Calculate the Present Value of a Growing Annuity Given the Following

question 132

Multiple Choice

Calculate the present value of a growing annuity given the following information: annual cash flows = $300,000; cash flow growth rate = 3%; required rate of return = 10%; timeframe = 55years.

• A) $4,170,509
• B) $4,285,714
• C) $2,919,356
• D) $3,000,000
• E) $4,181,982

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Definitions:

Correlation Coefficients

Numerical measures indicating the strength and direction of a linear relationship between two quantifiable variables.

Sample

A subset of a population selected for measurement, observation, or questioning to provide statistical information about the population.

Regression Equation

A mathematical formula used to predict the value of a dependent variable based on one or more independent variables.

General Form

Typically refers to the standardized or most commonly used version of an equation, document, or procedure.