A Perpetuity Will Pay $900 Per Year, Starting Five Years

question 34

Multiple Choice

A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What is the present value (PV) of this perpetuity on the date that it is purchased, given that the interest rate is 11%?

• A) $2695
• B) $4312
• C) $5390
• D) $3234

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Definitions:

Teamsters Union

represents a prominent labor union in the United States and Canada, known for its representation of employees in various industries, notably truck drivers and warehouse workers.

Strategic Campaign

An organized series of actions directed towards achieving a specific goal, often used in contexts of advocacy, marketing, or political movements.

NLRA

The National Labor Relations Act, a foundational statute in United States labor law that protects the rights of employees to organize, bargain collectively, and engage in concerted activities.

Penalties

Sanctions or fines imposed for violating laws or regulations.