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A Potential Investment Pays $10 Per Year Indefinitely

Question 16

Multiple Choice

A potential investment pays $10 per year indefinitely.The appropriate discount rate for the potential investor is 10%.The present value of this cash flow is calculated by:


A) multiplying $10 by the appropriate present value factor
B) dividing $10 by 10
C) multiplying $10 by the present value factor of an annuity
D) dividing $10 by .10

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