Answer to Question #147660 in Finance for 2so

Question #147660
Calculate the present value of a growing perpetuity with the following information (round off the answer to the nearest rand):


Cash flow at the end of the first year R60 000
Growth rate (g) 10%
Opportunity cost 20%
1
Expert's answer
2020-11-30T16:36:09-0500

Present value of a growing perpetuity "= \\frac{Cash \\; flow \\; at \\; the \\; end \\; of \\; the \\; first \\; year}{(Opportunity \\; cost - Growth \\; rate)}"

"= \\frac{60000}{(0.2 \u2013 0.1)} =R\\; 600000"


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