Question: Application exercise. Suppose that a piece of land gives a perpetual cash flow of $1 000 every year and that the discount rate is 6 percent. Determine the present value of this piece of land. Application exercise. Assume that the per capita income in an economy is expected to grow at f (t) = 80 000/(2 + t)2. What will be the long run (that is, t → ∞) per capita income in the economy?