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An investment of $50,000 is expected to yield $5,670 per annum in
perpetuity.
Required
Calculate the net present value of the investment opportunity if the cost
of capital is 9%.Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers and explanations.
The discount factor for a perpetuity is 1/r where r is the rate of interest. This is all explained in our free lectures on investment appraisal.
The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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