A Business Is Expected to Yield a Continuous Flow of Profit

question 50

Multiple Choice

A business is expected to yield a continuous flow of profit at the rate of $600,000 per year. If money will earn interest at the nominal rate of 8% per year compounded continuously, what is the present value of the business forever?

• A)$7,600,000
• B)$7,510,000
• C)$7,500,000
• D)$750,000
• E)$850,000