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​A Business Is Expected to Yield a Continuous Flow of Profit

Question 15

Multiple Choice

​A business is expected to yield a continuous flow of profit at the rate of $200,000 per year.If money will earn interest at the nominal rate of 2% per year compounded continuously,what is the present value of the business forever? ​


A) ​$10,100,000
B) ​$1,000,000
C) ​$10,000,000
D) ​$10,010,000
E) ​$1,100,000

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