Which of the Following Statements Regarding Perpetuities Is FALSE

question 35

Multiple Choice

Which of the following statements regarding perpetuities is FALSE?

• A)To find the value of a perpetuity one cash flow at a time would take forever.
• B)A perpetuity is a stream of equal cash flows that occurs at regular intervals and lasts forever.
• C)PV of a perpetuity =
• D)One example of a perpetuity is the British government bond called a consol.

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Definitions:

Operating Period

The length of time during which a business or a project is expected to operate or carry out its primary operations.

Break-even Sales

The amount of revenue needed to cover all fixed and variable costs, resulting in zero net profit or loss.

Business Division

A distinct part of a large company that operates under the firm's umbrella but focuses on a particular area of business or market segment.

Break-even Sales

The amount of revenue required to cover both the fixed and variable costs of production, resulting in no net profit or loss.