Which One of the Following Would Have the Greatest Value

question 59

Multiple Choice

Which one of the following would have the greatest value assuming each has a Year 0 cash flow of zero and a Year 1 annual cash flow of $100? Assume a discount rate of 8 percent,compounded annually.Also,assume any growth rate is positive.

• A)Perpetuity
• B)Annuity
• C)Growing perpetuity
• D)Growing annuity
• E)Growing perpetuity or growing annuity,as they would have equal values

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Definitions:

Gametophyte

The sexual phase in the life cycle of plants and algae that produces gametes, typically through mitosis.

Biologists

Scientists who study living organisms and their interactions with each other and their environments.

Pollen

Fine to coarse powdery substance comprising pollen grains, which are male microgametophytes of seed plants, responsible for the fertilization of the female ovule.

Self-incompatibility

A mechanism in some plants that prevents self-fertilization and promotes genetic diversity by rejecting pollen from the same or genetically similar plant.