If You Have a Perpetuity from T=0 Valued at PV=$1,000

question 20

Multiple Choice

If you have a perpetuity from T=0 valued at PV=$1,000, and the same cash flow stream results in a perpetuity starting from T=3 valued at $500, how much is the annuity from T=0 until T=3 worth, assuming r=10%?

• A) $5,000
• B) $500
• C) $50
• D) Cannot be determined from given information

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