Don't give answer in image Question 13Assume that you are looking at three perpetuities. Perpetuity 1 (P₁) has annual cash flows of $850 inYears 1 through infinity (1 - oo) and a present value at Year O of $10,119.047619. Perpetuity 2 (P₂)has annual cash flows of $620 in Years 11 through infinity (11 - oo) and the same effective rate asPerpetuity 1. Perpetuity 3 (P3) has annual cash flows of $780 in Years 25 though infinity (25 - 00)and the same effective rate as Perpetuities 1 and 2. Given this information, determine the value ofall three perpetuities when evaluated at Year 35.O $248,272.58O $242,490.65O $239,599.69O $245,381.62O $254,054.51

Perpetuity 1 rate = Present value/ Cash flow = 850/10119.047619…

ssume that you are looking at three perpetuities. Perpetuity 1 (P₁) has annual cash flows of $850 in ears 1 through infinity (1 - 0o) and a present value at Year 0 of $10,119.047619. Perpetuity 2 (P₂) as annual cash flows of $620 in Years 11 through infinity (11 - oo) and the same effective rate as erpetuity 1. Perpetuity 3 (P3) has annual cash flows of $780 in Years 25 though infinity (25 - ∞) nd the same effective rate as Perpetuities 1 and 2. Given this information, determine the value of Il three perpetuities when evaluated at Year 35.

ssume that you are looking at three perpetuities. Perpetuity 1 (P₁) has annual cash flows of $850 in ears 1 through infinity (1 - 0o) and a present value at Year 0 of $10,119.047619. Perpetuity 2 (P₂) as annual cash flows of $620 in Years 11 through infinity (11 - oo) and the same effective rate as erpetuity 1. Perpetuity 3 (P3) has annual cash flows of $780 in Years 25 though infinity (25 - ∞) nd the same effective rate as Perpetuities 1 and 2. Given this information, determine the value of Il three perpetuities when evaluated at Year 35.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 11E

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