What Annual Payment Must You Receive in Order to Earn

question 130

Multiple Choice

What annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $1,250?

• A) $77.19
• B) $81.25
• C) $85.31
• D) $89.58
• E) $94.06

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Definitions:

Product Life Cycles

The stages through which goods typically go through from development to withdrawal from the market, including introduction, growth, maturity, and decline.

Required Rate Of Return

This is the minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular project or investment.

Dividends

Profits distributed by a corporation to its shareholders, often as a share of the company's earnings.

Required Return

Required return is the minimum annual percentage earned by an investment that will induce individuals or companies to put their money into this investment, factoring in the risk involved.