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Which One of the Following Would Have the Greatest Value

Question 78

Multiple Choice

Which one of the following would have the greatest value assuming each has a Year 0 cash flow of zero and a Year 1 annual cash flow of $100? Assume a discount rate of 8 percent,compounded annually.Also,assume any growth rate is positive.


A) Perpetuity
B) Annuity
C) Growing perpetuity
D) Growing annuity
E) Growing perpetuity or growing annuity,as they would have equal values

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