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dusya [7]
3 years ago
15

Which of the following statements regarding perpetuities is​ FALSE? A. A perpetuity is a stream of equal cash flows that occurs

at regular intervals and lasts forever. B. To find the value of a perpetuity by discounting one cash flow at a time would take forever. C. PV of a perpetuity​ = StartFraction r Over Upper C EndFraction D. One example of a perpetuity is the British government bond called a consol.
Business
1 answer:
Xelga [282]3 years ago
7 0

Answer:

The answer is: C) PV of a perpetuity​ = StartFraction r Over Upper C EndFraction (I guess this means PV = r / C, which is FALSE)

Explanation:

The formula for calculating the present value of a perpetuity is:

                        PV = C / r

Where PV = Present Value, C = cash flow, r = discount rate.

A perpetuity is a stream of equal cash flows that lasts forever (perpetually).

The formula for calculating the present value of a perpetuity is simple, so there is no reason to spend time calculating the present value of each cash flow, since there are infinite cash flows.

A consol bond s a type of perpetuity issued by the British government (also by the US government)

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You are given the following information for Sookie's Cookies Co.: sales = $51,200; costs = $39,600; addition to retained earning
ipn [44]

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The depreciation expense for the company is $4615.

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profit before depreciation and tax = (sales - cost) - interest expense

= ($51,200  - $39,600)  - $1,560  

= $10040

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dividends paid = $935

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Therefore, The depreciation expense for the company is $4615.

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