Your recently departed rich, eccentric uncle has left for you in his will a large sum...
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Your recently departed rich, eccentric uncle has left for you in his will a large sum of money. Unfortunately, rather than giving you this sum of money immediately, he has instructed the executor of the will to pay you $10,000 in one year. This payment is to grow by 9% each year and to be made each year forever. If the appropriate discount rate is 10%, how much have you actually inherited? QUESTION 36 Calculate the present value of a growing annuity given the following information: annual cash flows = $100,000; cash flow growth rate = 2%; required rate of return = 9%; timeframe = 50 years. Your recently departed rich, eccentric uncle has left for you in his will a large sum of money. Unfortunately, rather than giving you this sum of money immediately, he has instructed the executor of the will to pay you $10,000 in one year. This payment is to grow by 9% each year and to be made each year forever. If the appropriate discount rate is 10%, how much have you actually inherited? QUESTION 36 Calculate the present value of a growing annuity given the following information: annual cash flows = $100,000; cash flow growth rate = 2%; required rate of return = 9%; timeframe = 50 years.
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A The answer can be calculated by using the following formula Present Value of Perpe... View the full answer
Related Book For
Andersons Business Law and the Legal Environment
ISBN: 978-0324786668
21st Edition
Authors: David p. twomey, Marianne moody Jennings
Posted Date:
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