(Present value of a perpetuity) At a discount rate of 13.00%, find the present value of a perpetual payment of $1,500 per year. If the discount rate were lowered to 6.50%, half the initial rate, what would be the value of the perpetuity? a. If the discount rate were 13.00%, the present value of the perpetuity is $ (Round to the nearest cent.) b. If the discount rate were lowered to 6.50%, half the initial rate, the present value of the perpetuity is $ (Round to the nearest cent.)
(Present value of a perpetuity) At a discount rate of 13.00%, find the present value of a perpetual payment of $1,500 per year. If the discount rate were lowered to 6.50%, half the initial rate, what would be the value of the perpetuity? a. If the discount rate were 13.00%, the present value of the perpetuity is $ (Round to the nearest cent.) b. If the discount rate were lowered to 6.50%, half the initial rate, the present value of the perpetuity is $ (Round to the nearest cent.)
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 7Q
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Transcribed Image Text:(Present value of a perpetuity) At a discount rate of 13.00%, find the present value of a perpetual payment of
$1,500 per year. If the discount rate were lowered to 6.50%, half the initial rate, what would be the value of
the perpetuity?
a. If the discount rate were 13.00%, the present value of the perpetuity is $
(Round to the nearest cent.)
b. If the discount rate were lowered to 6.50%, half the initial rate, the present value of the perpetuity is $
(Round to the nearest cent.)
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