Suppose the Yearly Interest Rate Is Given by R and the Annual

question 35

Multiple Choice

Suppose the yearly interest rate is given by r and the annual benefit flow B from a project is expected to continue indefinitely. Its present value is:

• A) B/r.
• B) B/(1+r).
• C) (1+r)/B.
• D) rB.
• E) B/(1+r)²

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Definitions:

Oral Agreement

A contract or agreement made through spoken communication and not formally recorded in writing.

Mutual Agency

A principle in partnership where each partner has the authority to bind the partnership in contracts and decisions related to the business's ordinary course.

Unlimited Life

Refers often to entities or corporations that have no predetermined duration for existence, allowing them to operate indefinitely.

Limited Liability

A legal structure that protects company owners' personal assets from being used to fulfill the company's debts and liabilities.