How much should be invested now (to the nearest $) to receive $24,000 per annum in perpetuity if the annual rate of interest is 5%?
A、$1,200
B、$25,200
C、$120,000
D、$480,000
A、$1,200
B、$25,200
C、$120,000
D、$480,000
【参考答案及解析】
The present value of a perpetuity is: PV = a/ r where a = annuity = $24,000 r = cost of capital as a proportion =5%=0.05 ...PV=24,000/ 0.05= $480,000
The present value of a perpetuity is: PV = a/ r where a = annuity = $24,000 r = cost of capital as a proportion =5%=0.05 ...PV=24,000/ 0.05= $480,000