Which of the Following Statements Regarding Growing Perpetuities Is FALSE

question 40

Multiple Choice

Which of the following statements regarding growing perpetuities is FALSE?

• A) We assume that r < g for a growing perpetuity.
• B) PV of a growing perpetuity =
• C) To find the value of a growing perpetuity one cash flow at a time would take forever.
• D) A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever.

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Definitions:

Common Resource

A type of good that is non-excludable and rivalrous, such as fish stocks in the ocean; it is available to all but can be depleted by excessive use.

Public Good

A good that is both nonexcludable and nonrival in consumption.

Fire Protection

A range of measures and services designed to minimize the impact of fire on people, property, and the environment.

Private Good

A good that is both excludable and rival in consumption.