Calculate the annual payment of company a

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Problem 1: An investment offers a perpetual cash flow of $50,000 per year. The return you require is 9%. What is the value of this investment (perpetuity)

a. 222,222.22
b. 333,333.33 Perpetuity P = PMT/r
c. 444,444.44
d 555,555.55

Problem 2: Company A borrows $5,000,000 from Bank C. The loan terms call for Company A to pay the loan back over five (5) years. If Bank C lends the money to Company A for this five (5) year loan at 5%, Calculate the annual payment

a. 1,154,874.00
b. 1,325,350.00 Present Value of an Annuity
c. 1,225,350.00 Solve for Payment
d 1,105,325.00

Reference no: EM132929487

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