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3 years ago

A perpetuity has a PV of $ 29 comma 000. If the interest rate is 7%, how much will the perpetuity paid every year

Business

1 answer:

Lady bird [3.3K]3 years ago

7 0

Answer:

The perpetuity payment per year was $2030

Explanation:

A perpetuity is a series of cash flows that are constant, occur after equal intervals of time and are for infinite period of time or are perpetual. Thus, it is like and annuity but with an infinite time period. The formula for the present value of of perpetuity is,

PV of Perpetuity = Cash Flow / r

Where,

r is the required rate of return

As we already know the present value of perpetuity and the required rate of return, we can input these values in the formula to calculate the annual perpetuity payment or cash flow.

29000 = Cash Flow / 0.07

29000 * 0.07 = Cash Flow

Cash Flow = $2030

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3 years ago

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Answer:

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Explanation:

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a. For Plan A

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= $182,400)

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= $2.28 million × 8%

= $182,400)

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After solving this,

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3 years ago

The following information relating to a company's overhead costs is available. Actual total variable overhead $ 75,000 Actual to

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Answer:

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3 years ago

A perpetuity has a PV of $ 29 comma 000. If the interest rate is 7​%, how much will the perpetuity paid every​ year

A perpetuity has a PV of $ 29 comma 000. If the interest rate is 7%, how much will the perpetuity paid every year