A Perpetuity with a First Payment of $500 Grows at a Constant

question 13

Multiple Choice

A perpetuity with a first payment of $500 grows at a constant rate of 5%.If the interest rate is 7%,what is the Present Value of this perpetuity?

• A)$10,000
• B)$25,000
• C)$7,142.86
• D)$4,166.67
• E)$50,000

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Definitions:

Human Resource Department

A department within an organization that is focused on managing employee-related processes like recruitment, training, and payroll.

Reengineering

The process of redesigning business processes and workflows to improve efficiency, productivity, and competitiveness.

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, and recovery of illnesses, injuries, and other physical and mental impairments in people.

Bureaucratic

Pertaining to the administration of organizations with a rigid hierarchy, fixed rules, and a focus on procedure over effectiveness.