A company received a proposal for the development of a new software. While analyzing the specifications, it was found that there
1 answer:
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Answer:
The correct response is Option b (1.60%).
Explanation:
According to the question,
Initial investment,
= $50,000
Perpetual annual cash flows,
= $800
Now,
The interest rate will be:
=
On substituting the given values, we get
=
=
i.e.,
=