True about perpetuities, Which of the following is true

True about perpetuities

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Reference no: EM131022558

Which of the following is true about perpetuities?

a. Since a perpetuity generates cash flows every period infinitely, the cash flow generated equals the PV times the interest rate.

b. Since a perpetuity generates cash flows every period infinitely, initial cash outflow must be discounted to calculate the present value.

c. Since a perpetuity generates cash flows every period infinitely, there is no way to solve for the cash flow using the present value and the interest rate.

d. Since a perpetuity generates cash flows every period infinitely, its future value is as same as its present value.

Reference no: EM131022558

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