1. What is the present value of an annual payment of $50,000 that is received in perpetuity if the discount rate is 11%?
a. $368,710
b. $550,000
c. $454,545
d. $794,910
e. None of the above
2. What is the present value of following streams of future cash flows if the discount rate is 15%?
Year 1: $0
Year 2: $0
Year 3: $0
Year 4: $30,000
Year 5: $30,000
Year 6: $30,000
Year 7: $30,000
a. $56,315.84
b. $58,919.43
c. $67,475.75
d. $50,251.91
e. None of the above