Calculate the Present Value of a Growing Annuity Given the Following

question 197

Multiple Choice

Calculate the present value of a growing annuity given the following information: annual cash flows = $120,000; cash flow growth rate = 2%; required rate of return = 9%; timeframe = 20 years.

• A) $1,059,762
• B) $1,259,762
• C) $1,459,762
• D) $1,659,762
• E) $1,859,762

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Definitions:

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world’s nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.

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A policy measure that restricts the trade of oil to certain nations or entities, often used as an economic sanction or a tool of foreign policy.

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A state of flourishing, thriving, good fortune or successful social status; often associated with economic growth and stability.

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A French philosopher, author, and journalist known for his contributions to existentialism and absurdism.