You Are Currently at Time Period 0,and You Will Receive

question 88

Multiple Choice

You are currently at time period 0,and you will receive the first payment on an annual payment annuity of $100 in perpetuity at the end of this year.Six full years from now you will receive the first payment on an additional $150 in perpetuity,and at the end of time period 10 you will receive the first payment on an additional $200 in perpetuity.If you require a 10 percent rate of return,what is the combined present value of these three perpetuities?

• A) $2,349.50
• B) $2,526.85
• C) $2,685.42
• D) $2,779.58
• E) $2,975.40

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Definitions:

Contribution Margin Ratio

A financial metric that indicates what percentage of sales revenue remains after variable costs are subtracted to cover fixed expenses.

Sales Mix

Refers to the proportion of different products or services that a company sells, aimed at maximizing profitability.

Fixed Costs

Expenses that do not change with the level of goods or services produced by the business.

Sales Mix

The composition of a company's various product or service offerings and their relative contributions to overall sales and profitability.