Payment if it is divided with interest rate will be formula of__________?
Correct answer: B. Present value of perpetuity
- A. Future value of perpetuity
- B. Present value of perpetuity
- C. Due perpetuity
- D. Deferred perpetuityHire An Accountant
Explanation
For a level perpetuity, the present value is found by dividing the constant payment by the interest rate, or PV = PMT ÷ r. Future value and deferred perpetuity formulas require additional timing information.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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