​A Business Is Expected to Yield a Continuous Flow of Profit

question 15

Multiple Choice

​A business is expected to yield a continuous flow of profit at the rate of $200,000 per year.If money will earn interest at the nominal rate of 2% per year compounded continuously,what is the present value of the business forever? ​

• A) ​$10,100,000
• B) ​$1,000,000
• C) ​$10,000,000
• D) ​$10,010,000
• E) ​$1,100,000

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Definitions:

Earth Layers

The division of Earth's structure into distinct layers, including the crust, mantle, outer core, and inner core, each with its unique composition and physical properties.

Bedrock

The solid rock layer beneath surface soils or sediments, serving as a foundation for the Earth's landscape.

Moss

A small, flowerless green plant that typically grows in dense green clumps or mats, often in damp or shady locations.

Lichen

Symbiotic organisms comprised of a fungus and a photosynthetic partner (usually an alga or cyanobacteria) living together in a mutually beneficial relationship.