Compute the present value of annual perpetual cash flow described as follows. Every odd year (i.e. years 1, 3, 5...) we have a fixed cash flow of $50, and every even year a fixed cash flow of $80 (years 2, 4, 6...). The annual interest rate is 7%. Even years: $80/7%= $1142.86 Odd Years: 70/7%(1+7%)=764.29 764.29+1142.86= $1,907.15 Did I go about this correctly?

Compute the present value of annual perpetual cash flow described as follows. Every odd year (i.e. years 1, 3, 5...) we have a fixed cash flow of $50, and every even year a fixed cash flow of $80 (years 2, 4, 6...). The annual interest rate is 7%. Even years: $80/7%= $1142.86 Odd Years: 70/7%(1+7%)=764.29 764.29+1142.86= $1,907.15 Did I go about this correctly?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 1MC

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