Question: Consider a perpetuity and an annuity with the same fixed cash flow and positive interes rates. Compare the present values of the two cash flow

Consider a perpetuity and an annuity with the same fixed cash flow and positive interes rates. Compare the present values of the two cash flow streams. Which one is greater? a. The present value of a perpetuity is greater than the present value of the annuity. b. The present value of the annuity is greater than the present value of the perpetuity. c. It depends on the duration of the annuity (N) d. It depends on the level of the cash flow e. It depends on the level of the interest rates Clear my choice

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4. Explain the strengths and weaknesses of each approach.

d. Describe any challenges in trying to communicate. If there were no challenges, explain why you think it was so easy.

3. Identify the methods used within each of the three approaches.