Question

The present value of a $25,000 perpetuity at a 14 percent discount rate is ________.

A) $178,571
B) $285,000
C) $350,000
D) $219,298

Answer 1

A) $178,571

Step-by-step explanation:

Present Value = $25,000 / (discount rate x 1.14)

Present Value = $25,000 / 0.14

Present Value = $178,571.43