$5)$ Beginning in year $0,$ with a payment of $$50,000,$ what is the present value of an asset in perpetuity that appreciates by $4\%$ each year and which is discounted at the rate of $6\%$ each year?

$6)$ Should we proceed with a project that will pay us $$100$ million per year $($starting at the end of the first year $($start discounting for year one$))$ for the next five years in return for an investment of $$400$ million today? Why, or why not? Assume a discount rate of $5\%$ per year

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5 To calculate the present value of an asset in perpetuity that appreciates by 4 each year and is di... View the full answer