Present Value of a Perpetuity What Is the Present Value,when

question 146

Multiple Choice

Present Value of a Perpetuity What is the present value,when interest rates are 10 percent,of a $75 payment made every year forever?

• A)$6.75
• B)$675.00
• C)$750.00
• D)$1,000.00

---

Definitions:

Dog Bathing Center

A specialized establishment dedicated to the cleaning and grooming of dogs, providing services such as baths, haircuts, and nail trimming.

After-Tax Cash Inflows

The amount of money that flows into a business after all tax obligations have been accounted for, reflecting the net cash earnings.

IRR

A financial metric used to estimate the profitability of potential investments, equal to the discount rate that makes the net present value of all cash flows both in and out of the investment equal to zero.

Pawn Shop

A retail business that lends money to people who bring in valuable items which they leave with the pawnbroker as collateral.