Multiple Choice
In payment for his help with the construction of Valhalla,Wotan offers Fafner two alternatives.First,he offers $1,260 per year forever (with the first payment in one year) .Second,he offers his sister-in-law,Freia (the girl with the golden apples) .If Fafner thinks that Freia is worth $12,000 and his required rate of return is 10.5%,which of the following is correct?
A) Freia is more valuable.
B) The perpetuity is more valuable.
C) The two are equal in value. He is indifferent between them.
Correct Answer:
Verified
Correct Answer:
Verified
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