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Supplementary objective test questions
7.4 How much needs to be invested now at 5% to yield an annual income of
$8,000 in perpetuity?
A $12,000
B $140,000
C $160,000
D $200,000
7.5 Two NPVs have been calculated for a project using the following discount rates:
10% = $(25,000)
5% = $45,000
Calculate the IRR for the project. Give your answer as a % to one decimal
place.
7.6 A landlord receives a rent of $1,000 to be received over ten successive years.
The first payment is due now.
If interest rates are 8%, then the present value of this income is equal to:
A $6,951
B $7,345
C $7,247
D $8,138
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