Final answer:
The present value of the perpetuity with $350 annual payments growing at 4% with an 11% discount rate is $5,000.
Step-by-step explanation:
The present value of a perpetuity that pays $350 per year, growing at a rate of 4% annually, with a discount rate of 11%, can be calculated using the growing perpetuity present value formula. This formula is given as PV = PMT / (r - g), where PV is the present value, PMT is the amount of the annuity payments, r is the discount rate, and g is the growth rate of the annuity. In this case, PMT is $350, r is 11%, and g is 4%.
Plugging the values into the formula gives us:
PV = $350 / (0.11 - 0.04) = $350 / 0.07 = $5,000.
Therefore, the present value of the perpetuity given these conditions is $5,000.