Final answer:
To evaluate a growing perpetuity investment, you need to calculate the present value of all the future cash flows using a discount rate.
Step-by-step explanation:
A growing perpetuity refers to a series of cash flows that continues indefinitely, with each subsequent cash flow growing at a constant rate. To evaluate a growing perpetuity investment, you need to calculate the present value of all the future cash flows using a discount rate.
The formula to calculate the present value of a growing perpetuity is:
PV = C / (r - g)
Where PV is the present value, C is the cash flow in the first period, r is the discount rate, and g is the growth rate of the cash flows.