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suter [353]
2 years ago
9

If the present value of a growing perpetuity is 214, the required rate of return is 10%, and growth rate is 3%, what is the cash

flow in year 1? (Round to the nearest whole number).
Mathematics
1 answer:
Kryger [21]2 years ago
3 0

The cash flow in year 1 is $15.

<h3>What is the cash flow in year 1?
</h3>

A growing perpetuity increases continuously and indefinitely.

Cash flow = present value x (rate of return - growth rate)

214 x (10% - 3%)

214 x 0.07 = $15

To learn more about present value, please check: brainly.com/question/17322936

#SPJ1

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