- This topic has 3 replies, 3 voices, and was last updated 8 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
Sir,
suppose perpetuity starts from year 5, DCF 10%
So can i calculate pv of cash flow at year 5 in following wayperpetuity 1/0.10 = 10
annuity
(4year) (3.170)Difference = 10 – 3.170
= 6.830pv at year 5 in perpetuity = FV * 6.830
Actually i didn’t understand the Logic behind the calculation given in BPP text book
Yes – you can calculate it that way 🙂
The answer will be exactly the same apart from rounding (because the tables only go to 3 decimal places) but that is not a problem in the exam.
Hi John
Can you please explain this bit.
pv at year 5 in perpetuity = FV * 6.830?
Many Thanks,
Noureen
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘perpetuity’ is closed to new replies.